The country will on Tuesday find out how the economy fared in the first quarter of the year when Statistics South Africa releases gross domestic product (GDP) data.
FNB said it expects GDP growth to have remained steady at around 1.1% quarter on quarter (q/q), boosted by the manufacturing sector, which posted output growth of 4.3% q/q, reflecting an acceleration from the 2.3% q/q in the previous quarter.
However, the bank said it remains concerned about the construction sector’s weakness, even if anecdotal evidence of rebuilding of infrastructure damaged during the July 2021 unrest and the recent floods should support activity in the near term.
The lender also warned that there are several headwinds in the second quarter.
“Persistent load-shedding and the uncertain global environment are critical risks to our growth prognosis. Although the first-quarter growth outcome may be encouraging and could even surprise on the upside, some headwinds could challenge subsequent quarterly growth outcomes,” FNB chief
economist Mamello Matikinca-Ngwenya said.
“In particular, the second-quarter growth outcome could be materially weaker amid the economic impact of the floods in some parts of KZN. In addition, while consumption expenditure growth likely remained resilient in the first quarter, the growth momentum may not be sustained as higher prices weigh on purchasing power.”
The South African GDP advanced by 1.2% q/q in the three months to December of 2021.
Five out of 10 activities recorded growth in production, notably agriculture, forestry and fishing on increased production of animal products; trade, accommodation and catering; manufacturing and personal services while the main declines were seen in mining, due to lower output from iron ore, gold and coal; utilities; construction (and finance (-0.8%).
In summary, the quarterly GDP number for the fourth quarter (q/q)for 2021 came in at 1.2%, while the year-on-year number came in at 1.7%, which produced a total of 4.9% GDP growth for the entirety of 2021 (the sum of the four quarters).
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