South Africa

Details

  • Service: Advisory, Risk & Compliance, Financial Risk Management
  • Industry: Financial Services
  • Type: Business and industry issue
  • Date: 2009/10/22

Economic Insight Quarterly Review Issue 10 Q3 2009 

South Africa’s Gross Domestic Product (GDP) continued contracting, coming in at –3% on a quarter-on-quarter basis in the second quarter of 2009. This follows contractions of 6.4% in the first quarter of 2009 and 1.8% in the fourth quarter of 2008 (quarter-on-quarter results).
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The key contributors to the decrease in GDP were agriculture, forestry and fishing (–17.1%), manufacturing (–10.9%) as well as wholesale and retail trade, hotels and restaurants (–4.5%).

 

The unexpectedly large contraction in agriculture, forestry and fishing can be attributed to the long lead times incumbent in the sector and the resulting sluggishness of economic players in their response to depressed economic conditions. However, the decline in the manufacturing sector was expected as the effects of weakened local and international demand for manufacturing output persists.

 

The main sectors that reported positive economic activity are construction, which grew at a rate of 12.2% spurred by projects related to the 2010 Soccer World Cup and the National Government’s infrastructure development programme, as well as mining and quarrying which grew at a rate of 5.5% due to restocking and sustained demand from China.