HILARY JOFFE: Do not panic if first-quarter growth is bad
One reason most economists are not bothered is the reassurance that the Reserve Bank has not revised its full-year growth forecast
Tucked away in the monetary policy committee’s statement last week was a suggestion that attracted relatively little attention: SA’s first-quarter economic growth rate could be a minus, not a plus. Following negative growth in mining and manufacturing, said the committee, there was a "possibility" of a contraction in GDP in the first quarter, though the Reserve Bank’s full-year growth forecast was unchanged. Is the market prepared for a negative first-quarter number when Statistics SA releases the new GDP data next week? Amid the continuing Ramaphoria, it’s not clear that it is. And there’s at least some danger that unexpected bad news could prick the confidence bubble and dent prospects for higher growth. The most recent Reuters consensus forecast still sees first-quarter growth at a positive 0.8%. But recent "high-frequency" data, as economists call the monthly statistics they use to try to predict what the quarterly outcome might be, suggest otherwise. Those data show first-quart...