NMG Mercado released[2 March 2015]: SA GDP in the spotlight
South Africa’s GDP grew by 4.1% during the last quarter of 2014, up from 2.1% achieved in the previous quarter. The fourth quarter’s growth was underpinned by gains in mining, manufacturing, finance, real estate and business sectors. Mining grew by 15.2%, whilst manufacturing increased at an annualised rate of 9.5%. The nominal GDP at market prices during the fourth quarter of 2014 was R979-billion, up R16 billion from the third quarter. GDP for the quarter was expected to increase at a rate of only 3.7%, however the effect of most industries going back to normal production provided a boost to GDP. This boost however was insufficient to push up growth rates for 2014 as a whole. The growth rate for last year fell to a meagre 1.5%, after the 2.2% growth rate achieved during 2013. Wide scale strike action and rolling blackouts placed the economy in a difficult position last year. The mining and quarrying sector had a negative contribution towards economic growth. Last week, Finance Minister Nhlanhla Nene also sliced growth targets for the upcoming years (2.0% for 2015 and 2.4% for 2016). In fact the entire budget speech painted a picture of uncertainty for the upcoming period, with increases in tax rates and greater fuel levy’s. If economic growth continues to remain low, the consumer is set to feel a further pinch on their pockets.
More information in the weekly NMG Mercado here.