GDP jumps by 5percent

Robert Laing

Robert Laing

South Africa's gross domestic product (GDP) was nearly R2trillion last year, Statistics South Africa reported yesterday.

An economic spurt in the final quarter brought GDP growth for the year to 5,1percent, maintaining a 5percent growth rate since 2003.

But most economists are expecting GDP growth to fall below 5percent for at least the next two years.

Finance Minister Trevor Manuel cut his economic growth expectations down to 4percent when he tabled the coming year's budget in parliament last week.

Nedbank's economic team expects the economy to grow at a very modest 3percent in 2008, but should recover somewhat in 2009.

Yesterday's statistics show South Africa is now mainly a nation of bankers, with "finance, real estate and business services" accounting for more than a fifth of the country's GDP.

An 8,3percent growth in financial services helped South Africa to maintain its above 5percent growth.

"Manufacturing" was the second biggest sector contributing 16percent. This sector achieved 4percent growth, a slowdown from 5,2percent in 2006.

"Wholesale and retail trade; hotels and restaurants" was the third largest economic sector, followed by "general government services".

"Mining" accounted for 6percent of last year's GDP, and "agriculture" only 2percent.

"Construction" was the fastest growing sector, climbing 18percent last year. The only economic sector to shrink was "mining and quarrying", which declined by 0,6percent.

The mining industry was hit last year by closures to resolve safety concerns, and is expected to decline further this year to meet Eskom's power rationing.

"Agriculture, forestry and fishing" managed a 0,3percent growth after the previous year's 8percent decline due to a severe drought.