The fourth quarter of 2012 saw the South African economy growing at a seasonally adjusted, annualised rate of 2,1%, as measured by growth in the country’s real gross domestic product.
This was almost double the pace of economic growth in the third quarter of last year, when the economy expanded by only 1,2% on the back of labour unrest in the mining sector, which caused massive losses in commodity production and export revenue. Real economic growth of 2,5% was recorded in 2012 and is forecast to be 2,7% in 2013.
The headline consumer price inflation rate averaged 5,7% year-on-year (y/y) in the first quarter of 2013, after coming in at 5,4% y/y in January and 5,9% y/y in both February and March. Inflationary pressures were caused by rising fuel prices on the back of international oil price and rand exchange rate movements.
Domestic inflationary pressures have mounted in recent months, driven by rising fuel prices and a weaker exchange rate, which may cause headline consumer price inflation to breach the 6% level in the short term. Based on current trends in and prospects for the global and local economy, as well as the outlook for consumer price inflation, interest rates are, however, forecast to remain at current levels throughout 2013.
Although nominal year-on-year house price growth in the middle segment of the market (homes of 80m² ─ 400m² and priced up to R3,8 million in 2013) accelerated to above the 10% level in the first quarter of 2013, early indications of a moderation in price growth later this year emerged in the first quarter. In real terms, i.e. after adjustment for the effect of inflation, house prices increased in the first quarter of the year after
deflating for nine consecutive quarters from the fourth quarter of 2010 up to end-2012.