Pretoria - South Africa's real gross domestic product at market prices increased by 3.2% in the second quarter of 2012, up from 2.7% in the first quarter, Statistics South Africa (Stats SA) said on Tuesday.
Stats SA said the contributors to the increase in economic activity were mining and quarrying contributing 1.5%, and finance (the largest contributor to economic growth), real estate and business services contributing 0.5%, the wholesale, retail and motor trade; catering and accommodation industry contributed 0.4%.
Meanwhile, general government services contributed 0.3% while the transport, storage and the communication industry contributed 0.2%.
GDP manager at Stats SA Kedibone Mabaso said economic activity in the mining and quarrying industry reflected positive growth due to higher production in the mining of other metal ores including platinum, other mining and quarrying and coal. The slower growth in finance, real estate and business services was because of a decrease in banking services, among others.
The electricity, gas and water industry at -0.2% as well as the manufacturing industry contributed negatively to GDP.
Manufacturing showed negative growth of 1%. The reasons for this could be attributed to lower production in basic iron and steel as well as in wood and wood products, noted Stats SA.
The unadjusted real GDP at market prices increased by 3% year-on-year, while the unadjusted real GDP at market prices for the first six months of 2012 increased by 2.5% compared to the first six months of 2012.
For the second quarter of 2012, the nominal value added during the second quarter of 2012 was R788 billion. This is R23 billion more than in the first quarter of 2012.
The consensus among analysts was that GDP would rise to 3.3%.
Economists at Nedbank said that the economy was still expected to grow by 2.5% for 2012, adding that mining would come under renewed pressured because of a weak global economy. In the same breath, manufacturing would be hurt by weak external demand, while consumer orientated sectors would continue to see growth but at a slower pace, as growth in disposable income moderates due to higher inflation and a stagnant jobs market.
"The latest GDP figures were in line with expectations and are unlikely to have implications for monetary policy in the short term," said Nedbank, adding that the Reserve Bank's Monetary Policy Committee was likely to maintain its accommodative monetary policy stance in the months ahead.
"With the inflation outlook likely to start deteriorating once the effects of the weaker rand and higher food and oil prices start to filter through, we think that the MPC will keep interest rates on hold rather than ease further. No change is expected until at least the fourth quarter of 2013," explained Nedbank.
The MPC will hold its next meeting from 18 - 20 September 2012.