From Bloomberg. Story by Rene Vollgraaff and Amogelang Mbatha
South Africa’s economy, the continent’s second largest, grew at a faster pace than economists predicted in the fourth quarter after manufacturing and mining rebounded from a series of strikes.
Gross domestic product increased an annualized 4.1 percent compared with the previous quarter, when it expanded a revised 2.1 percent, the statistics office said in a report released on Tuesday in the capital, Pretoria. The median estimate of 20 economists in a Bloomberg survey was 3.8 percent. The economy grew 1.5 percent for the whole of last year, the slowest pace since a 2009 recession.
“This is the first quarter that most of the industries actually went back to normal production,” Gerhardt Bouwer, executive manager of national accounts at Statistics South Africa, told reporters. “Hopefully we can keep this trend.”
Manufacturing, which makes up 13 percent of the economy, expanded for the first time in four quarters, increasing an annualized 9.5 percent. Mining surged 15.2 percent.
Growth may come under pressure again after power blackouts since last month disrupted factory output. Finance Minister Nhlanhla Nene is set to revise his 2.5 percent GDP growth forecast for this year when he delivers his national budget to lawmakers in Cape Town on Wednesday.
“We are still waiting to see what will happen with the electricity shortages and how that will affect the economy,” Francois Stofberg, an economist at Efficient Group in Pretoria, said by phone. “That will be the biggest determinant of how the economy will perform this year.”
The median estimate of 22 economists surveyed by Bloomberg is for the economy to expand 2.3 percent in 2015.
The rand fell 0.2 percent against the dollar to trade at 11.6530 as of 12:12 p.m. in Johannesburg after earlier strengthening to 11.6345 following the release of the data.
Agriculture expanded an annualized 7.5 percent in the fourth quarter, while the finance industry grew 3.5 percent and construction gained 3.5 percent. The retail and wholesale trade industry, which makes up 15 percent of the economy, contracted 0.3 percent.
Sluggish growth and a slowdown in inflation prompted the Reserve Bank to leave the benchmark repurchase rate unchanged at 5.75 percent at its last three meetings. Consumer prices increased 4.4 percent in January from a year ago, the slowest pace in almost four years.
“It appears as though the economy is in a rut,” Reserve Bank Governor Lesetja Kganyago said on Feb. 17. “Weak demand leads to low investment, weak investment means no growth in employment and household incomes.”
