SA's GDP contracts by 3%

“The seasonally adjusted real GDP at market prices for the second quarter of 2009 decreased by an annualised rate of 3% compared to the first quarter's 6.4%,” Statistics South Africa (Stats SA) reported on Tuesday, 18 August 2009.

In May, the first quarter results recorded an annualized 6.4% contraction, indicating that the country's economy was in a recession.

The main contributors to the decrease in economic activity for the second quarter of 2009 were the manufacturing industry (-1.6 percentage points); the wholesale and retail trade, hotels and restaurants industry (-0.6 of a percentage point).

The finance, real estate and business services and the agriculture, forestry and fishing industries also contributed to the drop in the economy.

“Industries that contributed to positive growth included the construction industry (at 0.5% of a percentage point), general government services and the mining and quarrying industry (each contributing 0.3% of a percentage point) as well as personal services (0.1% of a percentage point),” Stats SA said.

In the first quarter, mining and quarrying was among the main contributors to the figure.

According to the statistical body, the reason for the increase in mining and quarrying was due to the increase reflected in the mining of other metal ores, including platinum and other mining and quarrying, including diamonds.

Nedbank economist Nicky Weimer told BuaNews that the figure was not surprising as it had been expected by the market.

“The only shining light was the mining industry [that contributed positively] to the figure,” she said.

Nedbank had predicted a 2% contraction to the figure.

“Overall it is still a weak number. However the good news is that the contraction is at a slower pace,” said Weimer.

On Monday, Standard Bank senior economist Dr Johan Botha said he expected mining and manufacturing to do better in the second quarter.

Botha said he predicted a 2.9% contraction in GDP.

Article published courtesy of BuaNews