26 August 2014

South Africa: GDP Grows by 0.6 Percent

Pretoria — South Africa's economy grew by 0.6 percent in the second quarter of 2014, Statistics SA said on Tuesday.

This was compared to a 0.6 percent decrease in the real Gross Domestic Product (GDP) in the first quarter of the year.

The GDP is the total value of goods and services produced in an economy in a certain time period.

Main contributors to the increase in the second quarter of 2014 were general government services and the transport, storage, and communication industry, each contributing 0.4 of a percentage point, and finance, real estate, and business services with 0.3 of a percentage point.

Sectors which experienced declines included the mining and quarrying industry, with a 0.4 percentage point decrease and the manufacturing industry, with a 0.3 of a percentage point decrease.

Nominal GDP at market prices in the second quarter of 2014 was R891 billion, which was R17bn more than the first quarter of 2014.

Stats SA national accounts executive manager Gerhardt Bouwer said the decline in mining was because of an overall poor performance in the industry, and not just in the platinum sector.

"There was poor performance in the gold and all the other metal mining activities... They overall performed very poorly," he told reporters in Pretoria.

"There are a lot of reasons for it [the decline], like safety stoppages and strikes, etcetera."

He said the decline of the manufacturing sector could be linked to mining.

"We are not in the forecast business, but if you look at what happened over the last six months, we are sitting with low levels in mining, so it is almost like everything that will happen will have a positive impact," Bouwer said.

"It would be surprising not to see a positive in the next quarter."

He said growth in general government services was due to significant activity in the second quarter.

"There were more people involved in government than normally. One thing you can think of for example was that there was a big [national] election, where a lot of extra people were employed around it."

The unadjusted real GDP at market prices increased by one percent year-on-year.

The most notable performances were agriculture, forestry, and fishing expanding by R19bn to R34bn ,and general government services expanding by R6bn to R140bn.

Electricity, gas, and water expanded by R5bn to R27bn.

Manufacturing and mining and quarrying contracted by R1bn to R90bn and R66bn respectively.

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