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Power outages batter economy

By unknown | May 28, 2008 | COMMENTS [ 0 ]

Robert Laing

Robert Laing

Eskom outages knocked the economy harder than predicted during the first three months of this year.

The first quarter's headline gross domestic product (GDP) growth tumbled to 2,1percent from the 5,3percent achieved in the final quarter of last year.

Five days without power in January followed by rationing resulted in mining's component of GDP growth nose-diving 22percent.

Razia Khan, an economist at Standard Chartered, said: "The energy crisis and the forced closure of the mines have far outweighed any beneficial impact from higher commodity prices, but it is important to put this in context as a likely one-off."

Eskom not having power to sell saw the "Electricity, gas and water" sector shrink six percent, and its load shedding in turn caused manufacturing to contract one percent.

Construction continued to be the country's fastest growing economic sector, achieving nearly 15percent growth.

Good summer rains brought agriculture to second place with 12,5percent growth, recovering from the drought two years ago when it suffered a nearly 18percent decline.


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