South Africa: Economy decelerates in Q1
May 26, 2015
In the first quarter, the economy expanded 1.3% over the previous quarter at a seasonally adjusted annualized rate (SAAR). The reading came in well below the 4.1% expansion observed in the fourth quarter of last year; and it undershot the 1.7% increase the market had expected. However, in annual terms, GDP expanded 2.1%, which came in above the 1.3% expansion recorded in the fourth quarter.
Q1’s slowdown came on the back of a deceleration in mining and quarrying, which expanded 10.2% (Q4: +15.2% quarter-on-quarter SAAR). In addition, manufacturing swung from a 9.5% expansion seen in Q4 to a 2.4% contraction in Q1. The construction sector also decelerated over the previous quarter as it expanded 0.8% (Q4: +3.5% qoq SAAR). Conversely, the electricity and water sector performed better in Q1 as it grew 0.7%, which was a slight improvement over the 0.3% expansion seen in the previous quarter.
Author: Dirina Mançellari, Senior Economist