SA's real gross domestic product (GDP) rose by 1.2 percent on a quarter on quarter (q/q) and seasonally adjusted annualised (saa) basis in the third quarter of this year from a revised 3.4 percent (3.2 percent) in the second quarter‚ Statistics SA data showed on Tuesday.
GDP growth was expected to edge up to 1.6 percent‚ according to a poll of leading economists by I-Net Bridge. The range of forecasts was from 1.3 percent to 2.0 percent.
Following are economists’ reaction to the data:
ANNABEL BISHOP‚ Economist at Investec Group Economics:
"At an outcome of 1.2 percent qqsaa‚ the third quarter GDP data clearly has captured the impact of South Africa’s work stoppages stemming from recent illegal strike action on economic activity until the end of September. Growth for the full year of 2012 is likely to be lower than the 2.5 percent y/y previously expected‚ ( but still above 2.0 percent y/y) compared to the average of 3.3 percent y/y since 1994.
"The growth potential of the SA economy is estimated at 3.5 percent - 4.0 percent y/y‚ above this could be deemed inflationary as demand led inflation rises. Clearly there is little evidence of demand led inflation pressures currently‚ with price pressure stemming instead from exogenous factors such as rand weakness and high food prices‚ and the supply side concern of real wage increases. Given the upward price pressures the SARB is unlikely to alter interest rates on the basis of Q3.12’s poor outcome‚ indeed it already acknowledged the likely slowing in growth in the November MPC statement.
"In the absence of further marked strike action the economy should see economic growth pick-up to 3.0 percent y/y in 2013‚ and lift to 5.0 percent y/y by 2016‚ driven additionally by greater consumption expenditure (both government and the private sector) and fixed investment."
ELNA MOOLMAN: Economist at Renaissance Capital:
"At only 1.2 percent Q/Q (seasonally adjusted and annualised)‚ growth in the third quarter was even worse than we had anticipated. This weakness is at least partly owing to the negative impact from the strikes‚ which we expect to have an even bigger impact on growth and trade data for the fourth quarter of the year. The growth data for 3Q12 reflects a reasonably broad-based slowdown. Today’s data gave additional evidence of the slowdown underway in consumer demand growth‚ which was a key driver of post-recession economic growth. We expect this trend to continue."
MIKE SCHUSSLER‚ chief economist at Economists.co.za:
"The way things are going we are looking more and more at a situation of stagflation. Inflation is increasing from cost pressures‚ administered prices and the rand; and on top of all that‚ the strike. But even without the strike‚ we wouldn't have had a growth rate above 2.5 percent. We are looking at a stagnating economy‚ but we are not in recession territory‚ though we are unlikely to pick up in the fourth quarter and I see the effects lingering in the first quarter of next year."
THABI LEOKA‚ economist at Standard Bank:
“This was well below our forecast and means we will most probably revise our 2012 GDP forecast lower. As strikes continued in the mining sector in the fourth quarter‚ this points to a weak fourth quarter as well.”