GDP increased More Than Expected – That’s Good
It is always nice to hear that you have grown your business or income by more than you had expected. Essentially, this is what South Africa did, as a country, at the end of 2017.
Recent reports now show that in the last 3 months of the year, the Gross Domestic Product (GDP) was better than had been expected by the Treasury and others forecasts. Treasury had said they thought there would be a 1% growth for the year and it turned out that there was a 1.5% growth annually. This was because of a strong fourth quarter showing (of 3.1%). This is a very positive development since growth indicates a stronger economy, where more people are making more money.
‘it turned out that there was a 1.5% growth annually’
As a point of comparison, in 2016 there was only a sad 0.6% annual growth of the GDP so, you can see that having an extra 0.5% on top of the predicted 1% is way better than expected and pretty significant.
Revising Figures From 2016
Some of the figures from 2016 have been updated or reviewed. For example, the growth which had been set at 0.3% for 2016 was now updated to the already mentioned 0.6%. The fourth quarter of 2016 was revised from a contraction of 0.3% to a positive growth of 0.4%
For those who really like to count beans an interesting development is that, due to the government reviewing what happened in 2016 and the growth that was actually happening at the time (somewhat unnoticed till now), there were not two consecutive quarters of negative growth in 2016 and so “technically” then South Africa never really had a recession back then.
‘so “technically” then South Africa never really had a recession’
A recession is based on 2 consecutive periods or more of negative economic growth.