afrol News, 28 May - South Africa has recorded a six-year slow economic growth in the first quarter of 2008, with the GDP increasing only at 2.1 percent. This is the lowest growth since the third quarter of 2001 when the growth was 1.1 percent.

The government agency Statistics South Africa pointed out that electricity shortages influenced slow performance in the mining sector that saw its output fall by 22.1 percent in the first quarter resulting in a sharp decrease of South Africa's growth. "There is definitely a slowdown in the economy, the two industries that constrained growth (the most) were mining and quarrying, and manufacturing," said Joe de Beer, executive manager for national accounts at Statistics South Africa.

Statistics South Africa said manufacturing production had slipped by 1.0 percent, a down-side compared to the last quarter of 2007 when the growth was at 8.2 percent.

Since the start of power load shedding in January, this has impacted negatively on the mining and manufacturing sectors, which are the major catalysts in the South African economy. Eskom, which supplies 95 percent of the country's power, has cut electricity supplies after the government delayed its plan to expand a power plant, now having to spend US$ 44.3 billion to build new power plants.

With Eskom battling to meet demand for power in Africa's biggest economy it has demanded nation-wide energy saving strategies to prevent blackouts, especially for performing sectors which are still not back to full power supply.

On the overall, Statistics South Africa said economy grew by 4.0 percent on an unadjusted basis compared to the first quarter of 2007 and comparatively to 4.6 percent in the previous quarter.

In other sectors, for instance, annualised new vehicles sales have been falling for more than a year, and retail sales fell by 1.7 percent year-on-year in March. However, targeted consumer price index inflation remained at 10.1 percent year-on-year in March, way outside the 3 to 6 percent target.

Construction remained the star performer expanding 14.9 percent quarter-on-quarter as the country builds structures in preparation for 2010 Soccer World Cup but on the other hand, finance, real estate and business services slowed to 4.9 percent.

By staff writer

© afrol News

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