SA GDP Growth 3.8 percent in Fourth Quarter

SA GDP Growth 3.8 percent in Fourth Quarter

The gross domestic product was recorded higher than expected in fourth quarter offering further momentum to economic recovery. The GDP grew by 1.9 percent in 2013 compared to 2.5 percent in 2012. The fourth quarter growth in 2013 remained much higher at 3.8 percent, the only point market experts see positive in the recently announced data.

The country is facing polls this year. ANC has promised creating 5 million jobs if voted back to power. The country is currently facing more than 20 percent unemployment. The prices of necessary commodities have remained firm. Due to fall in currency in 2014, the imports have become expensive.

The GDP grew by marginal 0.7 percent in third quarter. As per Stats SA report, the higher production in automobile sector helped the economy. Also, the gold output was strong during fourth quarter.

In 2013, rand lost nearly 20 percent compared to US dollar and Euro. The exporters realized better margins in local currency. However, the better performance of mining companies has suffered due to workers strike. The platinum companies are currently facing strike called by AMCU on January 23. The outlook for first quarter of 2014 is bearish as the lower platinum output would have major impact on the exports.

As per HSBC estimate, South African GDP would grow at 1.8% in 2014, 2.7% in 2015. The estimates have been lowered due to decline in local consumption and lower exports due to strike.

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