GDP growth for 2018 slightly higher than expectations
By Sunita Menon - Mar 5th, 14:29
SA emerged out of 2018 with growth of 0.8% — which is slightly higher than expectations.
The Bloomberg consensus was for growth of 0.6%, while both the National Treasury and the Reserve Bank expected growth of 0.7%. This is higher than the tepid growth of 0.4% in 2016 but almost half the 1.4% recorded in 2017.
The growth has been driven by activity in the finance, real estate and business services sector, which was up by 1.8%, and general government services, which was up by 1.3%.
In the fourth quarter of 2018, GDP grew by 1.4% bolstered by the manufacturing sector, which grew 4.5%; the finance, real estate and business services sector, which grew by 2.7%; and the transport, storage and communications sector, which grew by 7.7%.
Mining, which fell by 3.8%, weighed on the overall figure.
Compared to the same period the year before, GDP grew by 1.1%. Expenditure on GDP grew by 0.7% overall in 2018 and by 1.6% in the fourth quarter of the year.
Growth was revised for the three previous quarters. In the first quarter, it was revised up from -2.7% to -2.6%, and in the second quarter from -0.5% to -0.4%. In the third quarter, growth was revised down from 2.6% to 2.2%.
The economy struggled to gain momentum in 2018 despite political changes after President Cyril Ramaphosa’s election. SA moved into recession for the first time since the global financial crisis in the first half of 2018, which saw economists and institutions alike revise their growth forecasts down which weighed heavily on growth for the year.
Annual growth has failed to breach the 2% mark since 2013.
Analysts say SA will need sustained growth of at least 5%, in line with the National Development Plan, to make a meaningful dent in the unemployment rate, which is nearing the 30% mark.Business Live
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