First-quarter GDP numbers ‘encouraging’ - economist

The South African economy narrowly avoided sinking into a technical recession amid record levels of load shedding since the start of the year.

The economy grew by 0.4% despite persistent power cuts.

The manufacturing and finance industries were the largest positive contributors to growth in the first quarter.

“Eight of the ten industries recorded growth in the first three months of the year with manufacturing and finance, real estate and business services the largest positive contributors. Manufacturing output increased by 1,5%, adding 0,2 of a percentage point to GDP growth,” said Chief Director for National Accounts Bokang Vumbukani Lepolesa.

Agriculture, forestry and fishing were the biggest drag on first-quarter growth.

“Agriculture slumped by 12,3%, weighed down by a decline in the production of field crops and animal products. Agriculture was the largest negative contributor in the first quarter, subtracting 0,4 of a percentage point from GDP growth.”

Jammine says the lack of electricity had a negative impact on the irrigation and harvesting of field crops.

"There was a very big disappointment which was the falloff in the agricultural output. This is largely attributable to load shedding and the disruption that the lack of electricity has had on irrigation and in harvesting."

Meanwhile, households increased spending on restaurants and hotels by 6.9%, the largest positive contributor to the 0.4% rise in overall household consumption expenditure.

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