South Africa’s gross domestic product (GDP) grew by 4,6% in the first quarter of this year, exceeding market expectations, which had forecast growth of about 4%.

The first-quarter expansion compares with a 3,2% rise in the final quarter of 2009, and was the highest quarter-on-quarter increase since the 5,5% growth recorded in the second quarter of 2008.

The Finance Ministry welcomed the positive growth, saying that this was good news for the economy, particularly in the current difficult environment.

Economists.co.za director Mike Schussler agreed that the GDP growth recorded in the first quarter of the year was “really good” at a time when the world economic recovery, and especially in Europe, was still facing challenges.

He said that South Africa was going ahead at full steam and that a number of the larger economic sectors had performed well during the quarter.

The manufacturing and mining sectors had made the largest contributions to the quarterly GDP growth of 1,3 percentage points and 0,8 of a percentage point, respectively.

Statistics South Africa (StatsSA) pointed out that the mining and quarrying sector had grown by 15,4% in the first quarter, driven by increases in the coal mining and the mining of other metal ores.

On a year-on-year basis, the mining and quarrying sector had grown by 6,5%.

Further, the manufacturing industry had grown by 8,4% quarter-on-quarter and by 3,1% year-on-year, driven by strong growth in the basic iron and steel, nonferrous metal products, metals products and machinery division, as well as the petroleum, chemical products, rubber and plastic products division.

However, Schussler cautioned that GDP growth for the remainder of the year might be slower than the first quarter’s 4,6% growth, as a number of price increases, including electricity, water, rates and taxes, could slow the economic growth somewhat.

This could also prolong the jobless growth trend, he said.

While the country’s GDP had grown in the first quarter of the year, the unemployment rate also increased quarter-on-quarter, pushing the jobless rate back over 25%, with 4,31-million people unemployed.

The Finance Ministry urged both the private and public sector to do more to restructure the economy to create more jobs, particularly for the youth.

"It is vital that the growth potential of South Africa is increased to ensure both sustainable job creation and development," it said in a statement.

Meanwhile, StatsSA highlighted that the nominal value added in the economy during the first quarter of the year amounted to about R627-billion.

This was R6-billion higher than the value added in the previous quarter and about R47-billion more than in the first quarter of 2009.

Year-on-year, South Africa’s GDP grew by 1,6% in the first quarter, recording the first positive year-on-year growth since the fourth quarter of 2008.