South Africa posts 2.5% growth in 2012

South Africa's economy grew at 2.5 percent in 2012, according to official data released Tuesday, as growth in Africa's largest economy slowed. The annual figure was in line with government forecasts, but was down from 3.5 percent in 2011. As many countries in Africa enjoy unprecedented sustained growth, South Africa's economy risks becoming tripped up, with confidence hit by a series of ratings downgrades and sclerotic policy implementation. The government has touted an all-encompassing National Development Plan to eliminate poverty by 2030, but which has failed to impress analysts. The growth figures come exactly a month before South Africa hosts a summit of large emerging economies Brazil, Russia, India, China -- the BRICS. South Africa remains the laggard of the group despite signs of a pickup in performance toward the end of last year, with growth reaching 2.1 percent in the last quarter of 2012. But analysts warned the sluggish rate would not solve the country's nagging poverty and unemployment. "We did see some recovery in some sectors but growth rates are very lacklustre still," said Nedbank economist Busisiwe Radebe. "Growth itself is largely irrelevant to the underlying fundamental story in South Africa -- job creation needs to reach a sustained 200,000-250,000 per quarter in order to make a dent in unemployment," said Peter Attard Montalto from Japanese bank Nomura. The GDP growth almost doubled from the 1.2 percent posted in the third quarter, according to data released by Statistics South Africa. This was only because "economic activity bubbled up into year-end after the stresses of strike action through Q3 into the start of Q4," said Attard Montalto, referring to months of wage-related unrest. The current growth rate was unsustainable without "a real underlying domestic and foreign recovery", he added. Mining activity, a mainstay in Africa's largest economy, fell by 9.3 percent in the fourth quarter. Gold and platinum mines, the centre of most of the strike violence, were hardest hit. The industry contracted by four percent in the year. A five percent increase in manufacturing helped the recovery, while animal products dramatically pushed agriculture growth up 10 percent in the last quarter. Growth was expected to increase in the first quarter of 2013, then fall afterwards with probable "further strike disruption and slowing unsecured credit growth", said Attard Montalto. "Conditions in mining and manufacturing will probably remain unfavourable," added Radebe. The country was very vulnerable to conditions in its largest trading partner the eurozone, which showed "no convincing sign of turnaround", she said. "Local export is still heavily exposed to Europe. It accounts for 24 percent of exports." Nedbank's economic outlook for 2013 therefore remains uncertain.