South African economy grew 1.9% in 2013
Africa's largest economy grew 1.9 percent last year, a significant slowdown from 2012, Statistics South Africa said Tuesday.
A 3.8 percent jump in fourth quarter gross domestic product was not enough for the country’s strike and unemployment-hit economy to improve on the lacklustre 2.5 percent growth seen in 2012.
Economists believe South Africa needs to grow at around five percent a year to bring down unemployment which remains stuck at around 25 percent and which has fuelled daily protests across the country.
Tuesday’s data tells a story of a year of troubles for the country, particularly in the vast mining sector, which contributed just 0.2 points to GDP growth during the year.
The quick pace of growth in the relatively strike-free fourth quarter was largely thanks to a rebound from a low third quarter growth rate of 0.7 percent.
That rebound is expected to be short-lived.
A near five-week strike has halted production in the platinum sector this year, with no end in sight.
Analysts at Barclays said “growth is unlikely to show a significant rebound in 2014 as domestic demand remains subdued”.
With inflation expected to go above six percent later this year, the South African Reserve Bank has stepped in to raise interest rates — a move likely to constrain growth further.