National Accounts Estimates -March 2012 issue

National Accounts Estimates (2009 - 2012) – March 2012 issue
Highlights

Year 2011

GDP growth rate
1. Data now available on the various sectors of the economy show that in 2011 GDP grew by 4.0% slightly lower than the 4.1% growth estimated in December 2011, mostly due to lower growths in “Manufacturing” and “Hotels and restaurants” offset by higher growth in “Sugarcane”. Exclusive of sugar, the growth rate worked out to 4.0% compared to the previous forecast of 4.2%.

Year 2012
GDP growth rate
2. On the basis of information gathered on key sectors of the economy GDP is now forecasted to grow by around 3.6% in 2012, lower than the forecast of 4.0% made in December 2011. Exclusive of sugar, the growth rate would be around 3.6% compared to 3.9% as forecasted in December 2011.

3. The main assumptions used for the forecast of 3.6% GDP growth in 2012 are:
(i) Sugarcane: a production of around 435,000 tonnes, same as in 2011.
(ii) Manufacturing Industries: to expand by 1.4% compared to 2.7% in 2011. Within the sector,
a. “Sugar milling would grow by 0.4% compared to 3.8% in 2011.

b. “Food processing” to recover by 2.0% after the decline of 0.2% in 2011,

c. “Textile” to stagnate after the high growth of 8.0% in 2011, based on low performance (-4.0%) recorded in fourth quarter of 2011 and taking into consideration the economic situation in our main markets, and

d. “Other manufacturing” would grow by 2.0% compared to 1.1% in 2011.

e. Activities of Export Oriented Enterprises (EOE) are expected to grow marginally by 0.5% compared to 8.4% in 2011.
(iii) Construction: to stagnate after the decline of 2.0% in 2011, assuming that public sector investment (road infrastructure, low cost housing and other public buildings such as prison, airport, etc) as announced in the last budget would materialise.
(iv) Hotels and restaurants: to grow by around 1.6% based on a forecast of 980,000 tourist arrivals in 2012 compared to 964,642 in 2011. Tourist earnings are forecasted at R 43.2 billion in 2012 against R 42.8 billion in 2011.
(v) Transport, storage and communications: to grow by 4.8% slightly lower than the 4.9% growth in 2011.
(vi) Financial intermediation: is expected to grow at a lower rate of 4.8%, compared to 5.5% growth in 2011.
(vii) Business activities: to grow by 8.8% compared to 9.0% in 2011.

Consumption and Saving

4. Final consumption expenditure of households and government is expected to grow by 2.5%, same as in 2011. Saving rate defined as the ratio of GNS to GDP at market prices, would decrease to 15.0% from 15.2% in 2011.

Investment
5. Investment would grow by 0.5% in 2012 after stagnating in 2011. Exclusive of aircraft and marine vessels, the growth rate would be 0.1% compared to no growth in 2011.

6. Private sector investment is expected to decline by 3.4% in 2012 after a growth of 1.5% in 2011.

7. Public sector investment would rebound by 13.2% after a decline of 5.0% in 2011. This expected growth would be mainly due to investment in road infrastructure, low cost housing and other public buildings such as prison, airport, etc. Excluding aircraft and marine vessels, the growth rate would be around 11.6% compared to the decline of 5.0% in 2011.

8. Investment rate defined as the ratio of investment to GDP at market prices would decrease to 23.0% from 23.7% in 2011. Exclusive of aircraft and marine vessels, the investment rate would be 22.9%.

9. Private sector investment rate would decrease to 17.0% in 2012 from 18.2% in 2011 and that of public sector would increase to 6.0% from 5.5% in 2011. Exclusive of aircraft and marine vessels, public sector investment rate would be 5.9% compared to 5.5% in 2011.

10. The share of the private sector in total investment would decrease to 73.8% from 76.7% in 2011 and that of the public sector would increase to 26.2% from 23.3% in 2011. Exclusive of aircraft and marine vessels the share of private sector would reach 74.0% and public sector to 26.0% compared to 76.7% and 23.3% respectively in 2011.

March 2012