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Farming's growth a fig leaf for economy
THE ECONOMY
THE economy continued to show reasonable growth in the third quarter but the figures released by the Central Statistical Service this week hide the poor performance of all but the agricultural sector. According to the CSS, gross domestic product was up by a seasonally adjusted and annualised 3,2% in the September quarter compared with 3,7% and 3,3% in the second and first quarter of this year respectively. However, the figures were once again inflated by a rampant agricultural sector. Overall (for the first nine months) economic output was 3% above the level of last year's first nine months. Economists widely expect 3% growth for calendar 1996. But stripping out agriculture - which was boosted 54,6% in the period by a bumper maize crop - left the core economy growing just 0,5% quarter-on-quarter, a continuation of the poor performance of the past 12 months. In the second quarter the non-agricultural economy improved by 1,8%. Particularly disappointing are the growth statistics from the manufacturing industry which accounts for about one quarter of GDP. Growth in this sector fell by 0,5% in the third quarter after a marginal 1,5% improvement in the second quarter. More recent production figures and the recent interest rate rise are expected to depress the sector even further in months to come. Worst hit though is the mining industry, which after negative growth of 0,1% and 5% in the first and second quarters respectively, declined by a further 7% in the third quarter. Following the Reserve Bank rate increase, economists have revised their growth forecasts for next year with a majority expecting GDP growth of no more than 2%. Syfrets economist Sandra Gordon says the adverse impact on consumer and investment spending will be offset partly by improved export earnings through the weaker rand, a modest rebound in commodities and stronger global growth.
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