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PREVIEW: SA Q1 GDP seen 3.9% q/q v 1.8%
by Evan Pickworth - Johannesburg, May 22 (I-Net Bridge)
A recession in South Africa is expected to be confirmed next week via a GDP growth rate of 3.9% quarter-on- quarter (q/q) seasonally adjusted annualised (saa) from 1.8% in the fourth quarter of last year, according to a consensus of 10 leading economists by I- Net Bridge.
The third quarter GDP last year was the 40th consecutive quarter of positive growth since 1998, but this came tumbling down in the fourth quarter as the first decline in a decade was registered. GDP a year ago was +1.7%. The range of forecasts for the current survey was from 0.7% q/q to 5.2%.
Statistics South Africa (Stats SA) will release the latest gross domestic product (GDP) growth figures on Tuesday next week at 11:30. Some of the sectoral breakdowns make for stark reading, with the mining decline penned in at around 42% and manufacturing around 25%.
One of the economists in the survey, Mike Schussler from Economists.co.za, made the remark that things are looking so bad that it may be the first time since the late 1800s that the agriculture sector is bigger than the mining sector on the quarter.
The agriculture sector is seen rising in low double digits in the quarter from 16.7% in Q4, with construction, finance, transport and government services making small headway in single digits.
All of the trades especially motor and wholesale, but also retail are seen down.
The shock headlines that can be expected ushering in news of the recession are also expected by economists to usher in a repo cut of 100 basis points next week.
