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ACDP MP and spokesperson on Finance, Steve Swart, has welcomed this morning's announcement by Stats SA of GDP growth figures for the fourth quarter of last year, which confirms that South Africa is out the recession.
"The GDP growth figure of 3.2 % is higher than markets forecast (2.6%), with the growth in the manufacturing sector (10.1 %) being particularly encouraging. Economic activity is most definitely improving and, consistent with international trends, and we look forward to a higher than forecast (2.3 % by Treasury and 2 % by the Reserve Bank) real GDP growth figure of about 3 % for 2010 and beyond.

On the downside, the retail sector fell 0.7 %, after slipping 1.1% in the previous quarter. This indicates that the economic slow-down and loss of almost 900 000 jobs continues to impact consumer spending. The contraction in households' real final consumption expenditure remains a significant constraint to greater economic growth prospects.

The promising GDP growth figures bode well for job creation and recouping the recent job losses over the medium term. Higher than forecast GDP growth figures will also result in increased tax revenues which, in turn, will reduce the high budget deficits forecast for the medium term.

Should the higher than forecast growth be sustainable over the medium term, it will reduce the burgeoning government debt (estimated at 40 % of GDP by 2012/13) and the related debt-service costs (estimated at R104 bn or almost 10 % of government expenditure by 2012/13). The increasing government debt is an issue of concern which we raised this morning during the meeting with the Governor of the Reserve Bank, Ms Gill Marcus.

We remain optimistic, however, that given this morning's encouraging GDP growth figures, our economic recovery will be more speedy than anticipated, and that economic growth figures for 2010 and beyond will be higher than the figures estimated during last week's budget speech."