Service Industries Boost South Africa Economy

01 June 2006

South Africa's economy has shown impressive expansion across the first quarter of the year, continuing a trend recorded through 2005.

Latest figures from government bureau Statistics South Africa reveal a 4.2% rise in GDP, helped by increased activity in the finance, real estate and business services industries.

The real annualized economic growth rates during the four quarters of 2005 were respectively 4.6%, 5.3%, 4.1 % and 3.2%, according to the agency.

However, not all sectors exhibited such robustness. Agriculture, forestry and fishing decreased by an annualized rate of 6.9% during Q1, compared with Q4 last year.

Says Ridle Markus, senior economist at Amalgamated Banks of South Africa: "Currently, the bank is concerned about household debt levels, high private sector credit extension, strong consumer demand and the widening current account deficit."

He adds: "However, despite these and other risks, we do not expect the bank to adjust interest rates during the next sitting in June."

Data sourced from Xinhua (China); additional content by WARC staff