Pretoria - South Africa's quarterly economic growth quickened more than expected to 2.1 percent in the closing months of 2012, boosted by the manufacturing and farm sectors, although overall expansion remains anaemic compared to the last decade.
The rand firmed to 8.78 against the dollar from 8.8475 before release of the data, whose strengthen undermines the case for further interest rate cuts to buoy growth.
The yield on the benchmark 2026 government bond edged up to 7.225 percent from 7.21 percent beforehand.
On an unadjusted year-on-year basis, the economy grew 2.5 percent in the fourth quarter from 2.3 percent in the previous three months.
Manufacturing output, which contributes about 15 percent to GDP, grew by 5.0 percent in the fourth quarter while agriculture expanded by 10 percent, off-setting a 9.3 percent contraction in mining production.
Overall, Africa's biggest economy grew 2.5 percent in 2012 from 3.5 percent the previous year, the statistics agency said.
A Reuters poll of 14 economists showed growth was expected to quicken to 1.6 percent in the fourth quarter from 1.2 percent in the third.
“It shows that we had a bit of life in our manufacturing sector which helped to offset the negative impact of the declining output in the mining industry,” said Elize Kruger an economist at Kadd Capital, adding however that annual growth was disappointing.
“This remains a mediocre growth performance for South Africa and too low to help us to finance our social-economic problems. Looking forward we are not majorly positive about 2013.”
The mining contraction was due mainly to the strikes that have beset the sector since last August, leaving more than 50 people dead, said Gerhardt Bouwer, manager for national accounts at Stats SA.
The unexpected strength in the economy comes as a last-minute piece of good news for Finance Minister Pravin Gordhan, who is due to present his 2013 budget to parliament on Wednesday. - Reuters