* Mining slumps, but manufacturing pulls growth up
* Reserve Bank might not need to cut rates
(Adds background, details, comments)
PRETORIA May 29 (Reuters) – South Africa’s economic growth
slowed in the first quarter of 2012, hit by a sharp contraction
in mining, but manufacturing showed surprising resilience,
suggesting the Reserve Bank might not need to cut interest rates
to stimulate output.
The economy grew by 2.7 percent quarter-on-quarter on a
seasonally adjusted and annualised basis in Q1, surpassing
analysts’ forecasts of 2.4 percent and compared with a 3.2
percent rise in the fourth quarter of last year, Statistics
South Africa said on Tuesday.
On an unadjusted year-on-year basis, economic growth was at
2.1 percent in Q1 from 2.9 percent in the fourth quarter.
A Reuters poll of 12 economists last week forecast
quarter-on-quarter growth of 2.4 percent in Q1 while
year-on-year expansion was seen at 2.2 percent.
“Better than what most people were looking for. The surprise
would be manufacturing being as strong as it was simply because
we saw quite a shock number for the March number so clearly it
wasn’t quite as badly as impacted,” said Kevin Lings, chief
economist at Stanlib.
“We know mining was weak because of all the closures and
strike activity, especially around platinum. The other sectors
held up reasonably well especially manufacturing.”
The mining sector shrank by 16.8 percent during the quarter
but factory output, which accounts for about 15 percent of GDP,
was up 7.7 percent.
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