S. Africa: manufacturing and financials grow GDP

The economy grew faster than expected in the fourth quarter of 2009, boosted by a continued bounce in manufacturing and a return to growth in the financial sector.

Statistics SA said GDP grew by 3.2% in the fourth quarter of last year on a seasonally adjusted and annualised basis, compared with an expansion of 0.9% in Q3.

The fourth-quarter growth was above the consensus forecast of a 2.5% expansion in a Reuters poll last week.

“The drivers of growth in this quarter are global demand, capital formation and increasing government activity rather than the domestic demand side,” said Rashad Cassim, deputy director general for economic statistics at Stats SA.

Household finances remain under pressure after South Africa’s first recession in two decades wiped out about 900000 jobs last year, and consumer debt levels are high. The manufacturing sector grew by 10.1% in the quarter while the wholesale/retail trade sector contracted 0.7%.

“This is very much the productive side of the economy boosting GDP rather than the consumption side,” said George Glynos, economist and managing director at ETM.

“It’s mainly the primary sectors of mining and manufacturing that have been behind this. Nearly 2% of the GDP figure is from those two sectors alone, which suggests South Africa’s exposure to China is helping boost local growth.”

Source:  www.thetimes.co.za, 20100224

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