Africa's GDP Growth Increases In Q4

South African GDP

Africa's GDP Growth Increases In Q4

The South African economy still has some distance to go when it comes to realizing its potential.

The trade sector was the second largest contributor to economic growth in the fourth quarter, mostly a result of a rise in activities related to retail, wholesale and motor trade.

The South African economy grew 3.1 percent in the fourth quarter, making the yearly growth at 1.3 percent, beating Treasury's estimates of 1 percent, said Statistics SA Tuesday.

Minister of Finance Nhlanhla Nene told Fedusa that government would hold talks with stakeholders in a bid to soften the impact of the Value-Added Tax increase on the poor, which comes into effect on April 1.

This signals that the country's economy is poised for a recovery.

But investors' sentiment has improved since Ramaphosa replaced Jacob Zuma, who resigned as head of state following a long series of scandals. Both have added 0.5 of a percentage point to the economic expansion. Government bonds also firmed. "The fourth quarter experienced the highest growth rate of 2017, with the economy expanding by 3.1% quarter-on-quarter - seasonally adjusted and annualised". The sector is recovering from the severe drought in 2016.

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Expenditure on GDP grew by 3.1% in the fourth quarter, with positive contributions to growth coming from consumption, investment and net exports.

The changes were based on better access to data sets, said Statistics SA deputy director-general Joe de Beer.

There will be more insight on the health of the local economy when South Africa's Gross Domestic Product (GDP) figure is released on Tuesday.

Stats SA reported on Tuesday that country's GDP growth exceeded National Treasury's expectation of 1.0% growth announced during the National Budget Speech in February a year ago, and shot far past market expectations which ranged from 0.2% to 0.8%.

Economic growth in South Africa is starting to show some momentum after a sluggish decade following a recession in 2008/9.

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