A new data on South Africa’s economy has revealed that the country experienced a 3.2% growth in the fourth quarter of 2011. According to a report published by Business Day, South Africa, the main contributors to this growth were the wholesale and retail sector, supported by government services and the manufacturing sector.
“SA’s wholesale and retail sector was the biggest contributor to growth during the fourth quarter of last year, even though its pace of expansion slowed to 5,2% from 6,1% in the third quarter. Rising income, low interest rates and receding debt levels helped to support household consumption last year, but rising inflation may erode the trend in the coming months. General government services and manufacturing were the second-strongest drivers of economic growth in the fourth quarter, the data showed.”
However, the current European recession might have a negative impact on South Africa’s economy as they serve as the country’s biggest trade partner.
“Europe is SA’s main trade partner, taking about 35% of the country’s exports. The UK economy, which is also under pressure, takes 15% of SA’s exports. “Risks to growth in 2012 remain on the downside due to the expected recession in the euro zone,” Standard Bank economist Sibusiso Gumbi said yesterday.
Source: BusinessDay SA