The Rand has strengthened slightly against a number of its most traded peers thanks to better-than-expected GDP figures for the fourth quarter of 2012.
The Gross Domestic Product figure was driven by better performances of the manufacturing, finance, and agriculture industries, South Africa’s GDP growth accelerated to 2.5% year on year in the fourth quarter versus the 2.3% increase in the third quarter, Overall South Africa’s GDP increased by 2.55% in 2012.
The figure took economists by surprise and led to the Rand making positive upward movements in the foreign exchange market. So far today the Rand is the best performing emerging market currency. Economist predictions or the GDP varied widely with some predicting a rise of anything from 0.5% to 2.9%.
Despite the stronger than expected figures consumer demand remained slow. Output in the wholesale, retail, motor trade, catering and accommodation sectors rose by only 1.5% in aggregate. “That figure had been above 5 per cent during much of 2011, and in 2012 showed a continuous decline suggestive of a less confident consumer who is seeing their real spending power constrained,” said Barclays.
The mining industry was to be as expected the weakest link in South Africa’s economic chain as it posted a decline of 9.3% quarter on quarter and a fall of 3.5% year on year. It is surprising that the sector, which has been blighted by violent protests and strikes hadn’t suffered more.
Shilan Shah, Africa economist at Capital Economics, summed up the prospects for South Africa in 2013:“All told we expect the economy to grow by 2.5% this year with perhaps a modest improvement in 2014 as the global economy picks up. This is well below South Africa’s potential and nowhere near fast enough to make a dent in the appallingly high rate of unemployment.”
Current ZAR Exchange Rates
The South African Rand to Euro exchange rate is currently trading at 0.0865
The South African Rand to US Dollar exchange rate is currently trading at 0.1134
The South African Rand to Pound Sterling exchange rate is currently trading at 0.0747
The South African Rand to Australian Dollar exchange rate is currently trading at 0.1106
The South African Rand to New Zealand Dollar exchange rate is currently trading at 0.1367
The South African Rand to Canadian Dollar exchange rate is currently trading at 0.1163
These exchange rates were correct as of 14:25 pm GMT
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