GDP expected to show signs of economic recovery

Tuesday, November 24, 2009

Pretoria - Economists are expecting the newly rebased Gross Domestic Product (GDP) figure for the third quarter to show signs that the economy is on the mend.

The GDP will be announced by Statistics South Africa (Stats SA) later today.

"Nedbank forecasts that we will emerge from the recession with a growth of around 1 percent," the bank's senior economist Nicky Weimer told BuaNews on Tuesday.

She said it was, however, difficult to predict the actual figure because Stats SA was revising and rebasing their methodology, among other things, to bring it in line with international best practice.

Mining is one of the sectors that are not likely to yield any positive numbers, said Weimer.

Standard Bank senior economist Dr Johan Botha told BuaNews that the financial sector, which is a large sector in terms of size, had been under pressure and was unlikely to perform well in the third quarter.

"Agriculture is also one that is difficult to predict as it is volatile," said Botha.

He said Standard Bank was predicting a half a percentage contraction in the GDP figure, adding that the bank was hoping to see a recovery.

In the second quarter, South Africa's GDP contracted by 3 percent indicating that the country was still in a recession. In the first quarter it contracted by 6.4 percent.

Economists said that the economy was on a recovery path, although it was fragile.

Investment Solutions senior economist Chris Hart, said that main thing was that South Africa was entering a recovery zone.

In the second quarter, 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).