South Africa’s Q2 GDP growth slows
Growth in South
Africa’s economy slowed more than expected in the second quarter of
2010, as mining contracted while expansion in manufacturing was lower
than before, backing the case for another interest rate cut.
Statistics South
Africa said the economy grew by 3.2 percent in Q2 on a seasonally
adjusted and annualised basis, compared to 4.6 percent rise in Q1 and
below the median forecast of 3.6 percent, from a Reuters poll of 16
economists last week.
The economy
expanded by 3.0 percent year-on-year unadjusted, compared to 1.6
percent in the first quarter of 2010, against predictions of a 3.1
percent rise.
Both the central
bank and the National Treasury had predicted a moderation in Q2 growth
and finance minister, Pravin Gordhan, said last week risks for global
growth had risen sharply and that this, coupled with increased
turbulence in financial markets, would see growth of at least 3 percent
in Q2.
“I think (the
quarter-on-quarter number) is a bit disappointing. It does suggest that
there has been some loss of momentum in the economy,” said Nedbank
chief economist, Dennis Dykes.
He said this could
prompt the Reserve Bank to cut rates further, adding to 550 basis
points of reductions between December 2008 and March this year.
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