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Real Annual GDP in 2010 at 2.8%

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The South African economy grew by 4.4 percent in the fourth quarter of 2010, Statistics South Africa (Stats SA) said on Tuesday.

Seasonally adjusted Real Gross Domestic Product (GDP) increased by 4.4 percent in quarter four, compared to a revised 2.7 percent (from an increase of 2.6 percent) increase in the third quarter.

The mining and quarrying industry, general government services, manufacturing industry and finance, real estate and business services and real estate and business services contributed to the increase in economic activity in the fourth quarter, with the construction industry contributing 0.0 percent for five consecutive quarters.

Kedibone Mabaso, GDP manager at Stats SA, said that the construction industry had been reflecting a downward trend since the completion of the 2010 Soccer World Cup stadia. “Even now construction, including residential, is not doing well,” she said.

Unadjusted real GDP for the fourth quarter increased by 3.8 percent, compared with the fourth quarter of 2009. Real annual GDP increased by 2.8 percent compared to the previous year’s 1.7 percent.

Stats SA’s Deputy Director General, Dr Rashad Cassim, said the figures suggested that the country is in a moderate growth territory.

“Real GDP grew at a slightly quicker pace than the market expected and above market expectations of a 4.2 percent increase. We expected growth of 4.5 percent quarter-on-quarter,” said analysts at Nedbank.

The data comes as Finance Minister Pravin Gordhan is preparing to deliver the budget speech in Parliament on Wednesday afternoon.

“Today’s GDP figures are encouraging, suggesting that the recovery is no longer confined to spending but also supported by a relatively robust rebound in production. As the economy continues to grow and slowly starts to create some jobs, while inflationary pressures gradually increase due to rising global fuel and food prices, the Reserve Bank’s Monetary Policy Committee (MPC) will probably feel less pressure to stimulate the economy,” said Nedbank.

It warned, however, that growth was likely to be more subdued as weak credit growth, limited fixed investment spending and infrastructure constraints hold back the recovery. – BuaNews

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.