South African economy grew 1.5% in 2014

South Africa’s gross domestic product (GDP) grew by a meagre 1.5% in 2014, lower than the 2.2% growth of 2013 and well below the 5.5% growth target set out by government in its National Development Plan.

Stats South Africa (SA) further revealed that GDP had expanded by 4.1% quarter-on-quarter in the three months to December 31, with the nominal GDP estimated at R979-billion for the quarter – R16-billion higher than in the third quarter of the year.

Despite the sharp rebound in the mining industry, with 15.2% growth experienced in this quarter, the sector still had lower seasonally adjusted quarterly value than it had in 2005, contributing only R227-billion, compared with the R246-billion it recorded then. It is, however, a significant increase from the R218-billion it contributed in 2009.
Meanwhile, the manufacturing sector grew by 9.5% in the fourth quarter.

BNP Paribas Cadiz Securities economist Jeffrey Schultz noted that with electricity supply problems, the risk of strike activity and persistently weak demand and activity conditions, the outlook for domestic growth remains riddled with challenges. “We, therefore, maintain our below consensus 2% growth forecast for 2015,” he added.