According to the South African Reserve Bank, South Africa’s real GDP for the fourth quarter of 2011, grew at a quarter-on-quarter, annualised and seasonally adjusted rate of 3.2% compared to an increase of 1.7% in the third quarter. The wholesale, retail and motor trade; catering and accommodation industry; the manufacturing industry; general government services; and the finance, real estate and business services were the main contributors to the overall acceleration in real GDP growth in the fourth quarter of 2011.
For 2011 as a whole, real GDP increased by 3.1% mainly due to the sustained steady expansion in activity in the services sector throughout the year. The Bank’s GDP growth forecast has been revised upwards to 3.0% in 2012 and 3.9% in 2013, while the IMF forecast marginally lower growth of 2.7% in 2012 and 3.4% in 2013.
Underlying factors, however, remain negative and the growth rate is still well below the targeted economic growth rate of 7% that is required to achieve the government’s target of reducing the unemployment rate to 14% by 2020.
During the fourth quarter of 2011, the official unemployment rate decreased to 23.9% from 25.0 % in the third quarter, while the broad unemployment rate, which includes discouraged work seekers, also decreased from 36.9% to 36.0%.
Although this decrease reflects a positive change, unemployment remains at an elevated level. The picture painted by a selected set of indicators of real economic activity remained fairly positive for overall activity in the real economy during the second half of 2011. The number of building plans passed contracted in the third quarter, but the trend was reversed and the number increased sharply during the fourth quarter. During the review period the composite leading business cycle indicator broadly followed a sideways trend.
The annual growth rates of both retail and wholesale trade sales increased during the third and fourth quarters of 2011, with retail sales most likely supported by a low interest rate environment. Growth in wholesale trade sales was also in line with the acceleration in domestic aggregate consumption.
The motor vehicle industry continued its robust performance through the six months up to the end of December 2011, recording positive annual growth in both total new vehicle and new passenger car sales. Growth in motor vehicle sales continued in early 2012, with annual growth rates of 5.4% and 10.8% recorded for total new vehicle and new passenger car sales respectively in March 2012. It should be noted, however, that it seems as if the pace of growth in vehicle sales, which peaked in September 2011, has moderated.
The overall picture of the real economy seemed positive during the second half of 2011 as most indicators reflected positive trends.
Source: The South African Reserve Bank.
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