afrol News, 19 May - Statistics South Africa yesterday reported that manufacturing sales last year had been 17 percent higher than previously thought. This will probably lead to a significant upward revision of GDP for 2003, meaning that South Africa's economic development is much stronger than previously thought.

The significant adjustment of South Africa's manufacturing sales statistics came after the figure was calculated on the basis of a new, expanded register of businesses in the country. The old sample of manufacturing businesses had not been representative, Statistics SA had found.

According to the statistical government agency, the new register is based on the South African Revenue Services VAT database. This includes all businesses in South Africa registered to collect VAT on the goods and services that they sell. The new manufacturing sales figure is therefore highly reliable.

The new figure of South Africa's manufacturing sales for 2003 is adjusted 17 percent upwards, meaning that economic activity in the country is significantly higher than previously believed.

According to Statistics SA, this upwards adjustment will probably also have a significant effect on the real figure of South Africa's Gross Domestic Product (GDP). A revision of GDP is expected to be published later this month and will result in a higher figure than previously reported.

According to an analysis made by Helmo Preuss of the South African daily 'Business Day', the country's GDP could be revised upwards by 20 percent or even more. The manufacturing sector accounts for around 20 percent of South Africa's economy and is therefore a significant basis for the calculation of the GDP.

Mr Preuss bases his calculations on previous upwards adjustments of manufacturing sales in South Africa. In 1998-99, Statistics SA had revised nominal GDP by more than 15 percent after a new calculation of the manufacturing sector.

A possible upwards adjustment of South Africa's GDP could also have positive effects on the country's financial position in world markets. A nation's GDP is used as the denominator for various issues in world finance markets. The larger the GDP, for example, the better is South Africa's international credit rating.

By staff writer

© afrol News

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