SA economic growth beats forecasts

PRETORIA.
South Africa’s economic growth came in higher than expected in the fourth quarter, boosted by stronger growth in the mining and agricultural sectors, according to data released yesterday.
Statistics South Africa said the economy grew by 4,4 percent in the fourth quarter on a seasonally adjusted and annualised basis, compared with an upwardly revised 2,7 percent expansion in Q3.
The market was expecting a 4,2 percent rise.
On an unadjusted year-on-year basis, the economy expanded by 3,8 percent from a revised 2,7 percent in the third quarter, also above a consensus of 3,5 percent.
The statistics agency said South Africa’s GDP increased by 2,8 percent in 2010, after a 1,7 percent contractions in 2009.
“It’s a very slow consolidation of moderate growth in the economy,” said Rashad Cassim, deputy director-general of economic statistics at Stats SA.
“We are now comfortably out of a recession
but we are in an area where several things
need to take place for the economy to really lift off.”
Agriculture and mining grew by 12,5 percent and 17,1 percent respectively while manufacturing returned to growth with a 4,1 percent rise after a 5,0 percent contraction in the third quarter.
The Reserve Bank has cut interest rates by a cumulative 650 basis points to a historical low of 5,5 percent since December 2008, in an attempt to boost growth in Africa’s largest economy.
The wholesale, retail trade showed a 3,5 percent growth compared to 3,3 percent in the third quarter, pointing to a steady recovery in spending.
“We can see the recovery is still uneven
with trade strongest, then consumption
and investment taking up the rear,” said Peter Attard Montalto, emerging market analyst at Nomura.
“Overall we would say this would confirm rates left on hold and be a touch stronger than SARB was originally looking for,” he added.
The rand was at 7,2160 against the dollar at 1006 GMT, from 7,2140 before the data was released at 0930 GMT.
The yield on the 2015 government bond was at 7,775, from 7,77 percent prior. – Reuters.