SA economy good for rates, rand
Johannesburg - South Africa's real gross domestic product (GDP) at market prices on a quarter-on-quarter seasonally annualised and adjusted (saa) basis rose by 5.6 percent in the fourth quarter of 2006 from a revised 4.5 percent (4.7 percent) in the third quarter of 2006, Statistics South Africa said on Tuesday.
Stats SA also reported that GDP was up 5.0 percent in 2006 from the 5.1 percent year-on-year reported in 2005 which was the fastest pace of growth since 1984.
The real growth rate was expected to have increased to 4.8 percent on a quarter-on-quarter saa basis according to a consensus of 14 economists surveyed by I-Net Bridge.
The range of forecasts was from just 4.1 percent q/q to as high as 5.4 percent q/q.
The year-on-year data was factored in at 4.9 percent by most economists, in line with the data released by the Treasury in the budget last week.
Investec economist Annabel Bishop, said that the growth was 'well above expectations'.
The unadjusted real GDP at market prices for the fourth quarter of 2006 increased by 6.1 percent compared with a revised 4.7 percent (4.5) the third quarter of 2006.
The GDP estimates are preliminary, and may routinely be revised, Stats SA added.
The data is used by both the fixed income and equity markets to determine the future direction of interest rates and the pace of companies' earnings growth.
But Bishop said that “the data does not change our view that interest rates will be left unchanged for most of this year, with a possibility of a 50bp cut at the October MPC meeting”.
T-Sec economist Mike Schussler said that the data was very strong and “certainly pushes our GDP for the year past 5 percent”.
“I suspect we are likely to get continued high GDP growth in all sectors of the economy outside of agriculture for the next few quarters.
"I suspect it will be good for the JSE. It should be a bit negative for bonds because it means there is room to increase interest rates. In fact, I am surprised by the GDP growth rate given that rates had increased four times by the time the fourth quarter ended. It should be positive for the rand."
Tebogo Hlabioa, economic analyst at Metropolitan Asset Mangers said the data showed the economy is growing very well.
"You might find that the construction sector and the turnaround in the manufacturing and mining sector had a positive effect," he said - I-Net Bridge
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Tourist section is great too. Visit www.southafrica-carhire.com to hire a car
Stats SA also reported that GDP was up 5.0 percent in 2006 from the 5.1 percent year-on-year reported in 2005 which was the fastest pace of growth since 1984.
The real growth rate was expected to have increased to 4.8 percent on a quarter-on-quarter saa basis according to a consensus of 14 economists surveyed by I-Net Bridge.
The range of forecasts was from just 4.1 percent q/q to as high as 5.4 percent q/q.
The year-on-year data was factored in at 4.9 percent by most economists, in line with the data released by the Treasury in the budget last week.
Investec economist Annabel Bishop, said that the growth was 'well above expectations'.
The unadjusted real GDP at market prices for the fourth quarter of 2006 increased by 6.1 percent compared with a revised 4.7 percent (4.5) the third quarter of 2006.
The GDP estimates are preliminary, and may routinely be revised, Stats SA added.
The data is used by both the fixed income and equity markets to determine the future direction of interest rates and the pace of companies' earnings growth.
But Bishop said that “the data does not change our view that interest rates will be left unchanged for most of this year, with a possibility of a 50bp cut at the October MPC meeting”.
T-Sec economist Mike Schussler said that the data was very strong and “certainly pushes our GDP for the year past 5 percent”.
“I suspect we are likely to get continued high GDP growth in all sectors of the economy outside of agriculture for the next few quarters.
"I suspect it will be good for the JSE. It should be a bit negative for bonds because it means there is room to increase interest rates. In fact, I am surprised by the GDP growth rate given that rates had increased four times by the time the fourth quarter ended. It should be positive for the rand."
Tebogo Hlabioa, economic analyst at Metropolitan Asset Mangers said the data showed the economy is growing very well.
"You might find that the construction sector and the turnaround in the manufacturing and mining sector had a positive effect," he said - I-Net Bridge
Article from http://www.busrep.co.za/
Tourist section is great too. Visit www.southafrica-carhire.com to hire a car
Labels: South Africa - Economy
