South African Growth Slows to 0.2%

Nov. 25, 2008
Manufacturing contracted by 1.1%

Against growth of 5.1% in the previous quarter, South Africa's economy grew by 0.2% in the third quarter, with a large slowdown in manufacturing, the national statistics office said last week.

Statistics South Africa said that manufacturing contracted by 1.1%, while the retail and tourism sector shrank by 0.9%. Mining, which has been hit by a global drop in commodities prices, shrank by 0.4%.

"The unadjusted real GDP at market prices for the first nine months of 2008 increased by 3.7% compared with the first nine months of 2007," the agency said.

Finance Minister Trevor Manuel last month revised down South Africa's growth forecast for the year from 4% to 3.7%, following four years of economic expansion at 5% a year.

"The manufacturing and mining sectors, which are the biggest contributors to the economy, are already in recession. They are not likely to bounce back until at least the second quarter of next year," said Chris Hart, economist at Investment Solution.

Since the end of apartheid in 1994, South Africa has cemented its position as Africa's leading economy with an average annual growth rate of 3%. But disruptions to electricity supply in the first quarter of 2008 temporarily halted mining and manufacturing production, dampening growth.

The country is also struggling to minimize the rate of unemployment, currently at 23.1%, though unofficial figures suggest that it is about 40%. Ruling party presidential hopeful, Jacob Zuma, has promised to halve unemployment by creating more than 5 million jobs when he is elected to the office.

Copyright Agence France-Presse, 2008

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