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GDP grows by 2% in third quarter

Dec 5, 2017
GDP grows by 2% in third quarter

South Africa’s Gross Domestic Product (GDP) grew by 2% in the third quarter of 2017.

“In quarter three of 2017, the economy grew by 2% and we can see that year-on-year [it came in at] 0.8% and on a nine-month to nine-month basis, it came in at 1%,” said Statistician General Risenga Maluleke.

Maluleke on Tuesday addressed his first GDP media briefing as Statistician General since taking over from his predecessor Pali Lehohla on 1 November.

“Looking at growth rates over time, from quarter four of 2016 there was some negative growth in two quarters, including quarter one of 2017 but there was a [revised] 2.8% growth in quarter two of 2017,” Maluleke said in Tshwane.

Second quarter GDP growth, which pulled the South African economy from a technical recession, was revised from 2.5% to 2.8% after the incorporation of revised data sources.

In the third quarter, the primary sector leveraged the highest growth at 14.9%, while the secondary sector had growth of 2.1%, followed by the tertiary sector with 0.3%.

The agriculture, forestry and fishing industry was the largest contributor to growth in GDP at 44.2% and contributing 0.9% to GDP. The increase in agriculture was driven by increased production of field crops and horticultural products.

Mining and quarrying increased by 6.6% and contributed 0.5% to GDP growth, while manufacturing increased by 4.3%, contributing 0.5% to GDP growth. Growth in mining was mostly due to increased production for gold and platinum group metals.

However, there was negative growth in trade, catering and accommodation and general government services. Negative growth in trade was due to weaknesses in wholesale trade sales, despite a rebound in retail trade sales while negative growth in general government services was partly attributed to declining employment numbers.

“The biggest [contributor of] negative growth was electricity at a negative 5.5%,” said Maluleke.

Electricity generated and consumed as well as water distribution declined.

Nominal GDP values in the third quarter came in at an estimated R1 168 billion in the third quarter. Manufacturing was up by R9 billion to R140 billion, while mining was up by R7 billion to R83 billion and electricity was down by R6 billion to 39 billion.

Expenditure

On the expenditure side of GDP, expenditure on real gross GDP grew by 2.1%, while final consumption expenditure by households increased by 2.6% in the third quarter contributing 1.6% to total growth.

Government final consumption expenditure (GFCE) decreased by 0.5% in the third quarter.

The export of goods and services decreased by 10.3% and imports decreased by 13.7%.

Exports of mineral products, base metals and precious metals were down, while exports of agricultural products were up in the third quarter.

Imports of mineral products, machinery and equipment, and vehicles and transport equipment contributed to the decline in imports in the third quarter.

The Deputy Director General responsible for Economic Statistics, Joe De Beer, said Stats SA had seen a range of numbers from analysts when coming to GDP growth.

“We’ve seen quite a range of numbers from analysts. I don’t think a growth of 2% is that much different from the consensus of analysts… If you take a broader view, this number is quite aligned to what expectations are at the moment in the markets,” said De Beer.

Meanwhile, Nedbank economists on Monday had predicted GDP growth to slow to an annualised 2.1% in the third quarter.

In a recent interview with SAnews, analyst and expert at the University of KwaZulu-Natal Lukhona Mnguni said GDP figures would be positive.

“I think we will see marginal growth of some 1.5% still in the third quarter. I don’t expect the trajectory to turn back again to negative growth, but year-on-year, we could be at negative growth,” said Mnguni at the time. - SAnews.gov.za