GDP growth rate
1. Latest information gathered on the various sectors of the economy indicates that GDP growth for 2012 was 3.3% same as estimated in March 2013. However, some changes were noted at industry level and the main changes are:
(i) Manufacturing: a higher growth of 2.2% compared to 1.5%. Within the sector, “food processing” grew by 7.6% instead of 6.6% and “other manufacturing” registered no growth instead of a decline of -1.4%.
(ii) Information and communication: a lower growth of 8.6% instead of 9.0%.
(iii) Arts, entertainment and recreation: a lower growth of 8.5% instead of 8.8%.
GDP growth rate
2. On the basis of information gathered on key sectors of the economy and performance of the first quarter, GDP is forecasted to grow by 3.3%, lower than the 3.5% forecasted in March 2013.
3. Exclusive of sugar, the growth rate would be 3.4% compared to 3.7% forecasted earlier.
4. The main assumptions used for the forecast of 3.3% growth in 2013 are:
(i) Sugarcane: sugar production forecasted at around 425,000 tonnes of refined and special sugars, resulting in a growth of 3.2% compared to a decline of -7.3% in 2012.
(ii) Manufacturing: to expand by 2.1%, slightly lower than the 2.2% growth in 2012. Within the sector,
a. “Sugar milling” would grow by 3.2% after a contraction of -6.3% in 2012;
b. “Food processing” would grow by 2.2% compared to 7.6% in 2012. The positive growth would be mainly due to a new fish processing plant due to start in the second semester of 2013;
c. “Textile manufacturing” would grow at a rate of 2.0% based on the performance of the first quarter of 2013, compared to a decline of -1.1% in 2012; and
d. “Other manufacturing” to expand by 2.0% after stagnating in 2012.
Activities of Export Oriented Enterprises (EOE) are expected to grow by 2.6%, higher than the 1.4% growth registered in 2012.
(iii) Construction: to decline further by -7.7% after the contraction of -3.0% in 2012, mostly explained by completion of major projects such as airport extension and shopping complex in 2012 coupled with rescheduling of road decongestion projects.
(iv) Accommodation and food service activities: a growth of around 2.5% based on a forecast of 990,000 tourist arrivals in 2013 compared to 965,441 in 2012. Tourist earnings are forecasted at R 46.1 billion compared to R 44.4 billion in 2012.
(v) Information and communication: to expand by 8.2%, lower than 8.6% in 2012.
(vi) Financial and insurance activities: to grow at a lower rate of 5.5% compared to the growth of 5.7% in 2012.
Consumption and Saving
5. Final consumption expenditure of households and government is expected to grow by 2.8%, same as in 2012. Saving rate defined as the ratio of GNS to GDP at market prices, would reach 14.8% lower than the figure of 15.1% in 2012.
6. Total investment would continue to decline and is expected to contract by -0.1% in 2013 after the -0.8% fall in 2012. However, exclusive of aircraft and marine vessels, a drop of -3.1% is expected compared to -0.8% in 2012.
7. Private sector investment is expected to rebound by 1.9% in 2013 after the negative growth of -1.9% in 2012. The positive growth would be mainly due to investment in marine vessels and a new fish processing
plant. Exclusive of aircraft and marine vessels, investment would decline by -1.3% compared to -1.9% in 2012.
8. Public sector investment is expected to contract by -6.4% in 2013 after a rebound of 2.9% in 2012. This decline would be mainly explained by completion of major projects such as airport extension, coupled with rescheduling of major road decongestion projects. Excluding aircraft and marine vessels, a decline of
9. -8.8% would be observed compared to a growth of 2.9% in 2012.
10. Investment rate, defined as the ratio of investment to GDP at market prices would be 22.2% lower than the figure of 23.0% in 2012. Exclusive of aircraft and marine vessels, the rate would be 21.5% compared to 23.0% in 2012.
11. Private investment rate would decrease to 17.2% from 17.5% in 2012 and that of public investment rate to 5.0% from 5.5%. Exclusive of aircraft and marine vessels, private investment rate in 2013 would be 16.7% and that of public 4.9%.
12. The share of the private sector in total investment is expected to increase to 77.5% from 76.0% in 2012 while that of the public sector would decrease to 22.5% from 24.0%. Exclusive of aircraft and marine vessel, the share of private sector investment in 2013 would be 77.4% and that of the public sector 22.6%.