SA’s gross domestic expenditure up 0.5%

SOUTH Africa’s real gross domestic expenditure grew by 0.5 percent in the third quarter of this year after expanding by a revised 3.7 percent in the second quarter, Statistics SA said yesterday.

Household expenditure reportedly rose by 2.6 percent in the third quarter after increasing by 1.4 percent in the previous quarter.

Government expenditure was up, increasing by 2.1 percent in the quarter compared with a 1.4 percent increase in the second quarter.

Joe de Beer, the deputy director-general of economic statistics at Stats SA, said the increase in consumer spend was mainly as a result of expenditure on health services, which increased by 10 percent and contributed 0.7 of a percentage point.

This was largely concentrated in additional spend on health-related costs as well as purchases of recreational and tourism-related goods and services by residents abroad.

Gross fixed capital formation contracted by 1 against a decrease of previously.

Real gross domestic product (GDP) was largely driven by a R12.3 billion accumulation in inventories in the trade and mining sectors.

Investec economist Kamilla Kaplan said the increased expenditure was also associated with the election-related rise in employment.

“On a trend basis however, public sector employment is expected to decrease. In its October 2016 medium-term budget policy statement the National Treasury reaffirmed that “all national departments will have to moderate headcounts”, she said.

Gross fixed capital formation contracted for the fourth consecutive quarter at 1 percent in the third quarter, translating to a negative contribution of 0.2 percent.

Private sector fixed investment, which comprises nearly two-thirds of total fixed investment, contracted by 1.6 percent in the third quarter after declining by 4.1 percent in the second quarter. percent 6.8 percent