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The economic recovery gained further momentum in early 2010
Posted: 17th June 2010
- Real gdp growth came out better than market expectations of annualised growth of 4,3% q-o-q (1,4% y-o-y). Nedbank expected real gdp to grow by a seasonally adjusted annualised 4,5% q-o-q and 1,4% y-o-y.
- Most major industries either returned to growth or recorded faster growth in the first quarter of 2010, with the exception of the construction and general government sectors, where slower growth was recorded.
- The best performing sectors were the mining and manufacturing sectors.
- The recovery is expected to maintain momentum over the next two quarters, boosted by the injection from the FIFA World Cup, reasonable global demand and the continued recovery in domestic demand on the back of low interest rates, more manageable debt levels and a steadier labour market.
- Real gdp is now forecast to grow by a slightly stronger pace of around 3,1% (previously 2,8%) in 2010 as a whole after shrinking by 1,8% in 2009 as whole.
- Although the recovery is not only track but gaining some momentum, it is coming off a low base and the risk to the forecast remains on the downside given an uncertain global outlook and a still vulnerable local consumer.
- The figures should not have too much significance for monetary policy. We expect the MPC to focus on the short- to medium term outlook, which is still vulnerable. We maintain our forecast of steady interest rates until the third quarter of 2011, with potential downside in the short term.
Posted by: Leapfrog Property Group
Useful documentation:
Nedbank Monthly Report Gdp Q1 2010
