South Africa's real gross domestic product (GDP) at market prices on a quarter-on-quarter (q/q) seasonally adjusted annualised (saa) basis rose by 3.2 percent in the fourth quarter of 2009 after +0.9 percent in the third quarter of 2009, Statistics South Africa (Stats SA) data showed on Tuesday.

For 2009 GDP came in at -1.8 percent y/y compared with +3.7 percent in 2008. There were no revisions to any of the quarters in 2009.

Q4 growth was expected to have come in at +2.6 percent according to an I-Net Bridge survey of leading economists. The range of forecasts for the survey, among eight economists, was from 1.4 percent q/q to 3.2 percent.

The following are economists' snapshot reactions to the data:

George Glynos, ETM:

"A decent figure. Mining and manufacturing are the key components that drove it higher. Construction also provided a bit of a boost. So it's fundamentally a case of the primary sectors boosting growth. I suspect that this reflects South Africa's increased exposure to China."

Carmen Altenkirch, Nedbank:

"The recovery in the South African economy gained further momentum in the fourth quarter, with growth beating market expectations. The manufacturing sector outperformed other sectors in the economy, growing by 10.1 percent q-o-q.

The manufacturing sector, which exports roughly 30 percent of domestic production, benefited from the recovery in the global economy as well as strong demand for beneficiated metals from China.

"In contrast, sectors facing the domestic consumer, particularly retail trade as well as finance and real estate continued the lag the recovery, as households remained cautious, even as the supply side of the economy has slowly begun to recover.

"Overall, this year we expected that the economy will grow by 2.4 percent."

Freddie Mitchell, Efficient Group:

"I am dumbstruck, astounded by that figure. +3.2 percent is a really good figure and was better than the market had expected. I hadn't expected that.

"The two main contributing factors were manufacturing and general government, which isn't really a surprise. Perhaps you could call it an expected, pleasant surprise."

Annabel Bishop, Investec:

"SA's better than expected GDP outcome closes the door on any further interest rate cuts, and potentially strengthens the chance of the first rate hike (we expect a 50bp hike in October). Despite the pick-up in growth a sharp, V shaped recovery remains unlikely in SA due to its heavy dependence on global demand and the degree of job losses and company failures last year.

"Further sharp inventory build up was likely, but this cannot be sustained if global demand does not strengthen on a continual basis. We expect to see the demand side lagging the supply side. Without the annualisation effect, GDP actual growth would have been below 1.0 percent for the fourth quarter, q/q."

Adenaan Hardien, Cadiz Asset Management:

"The report showed that growth momentum continued to pick up in the last quarter of 2009, after South Africa exited its first recession since 1992 in the third quarter. The economy grew at an annualised 3.2 percent in the fourth quarter, following growth of 0.9 percent in the third quarter. The fourth quarter reading was stronger than expected.

"The economy had posted negative quarterly growth rates from the fourth quarter of 2008 to the second quarter of 2009. The economy contracted by 1.8 percent in 2009 after growth of 3.7 percent in 2008.

"All sectors except for electricity, construction and personal services, showed improving trends in the quarter. Agriculture and trade contracted in the quarter, but at a lesser rate than the preceding quarter. But the major contributors to the pickup in overall growth came from mining, manufacturing and government services.

"Although we will have to wait for the Reserve Bank Quarterly Bulletin to get detail on the demand-side numbers, the expectation was that activity would continue to pick up on the back of global demand, less inventory shedding and a stabilisation of domestic demand. We expected that growth momentum would at least be maintained into the early part of 2010 and accelerate through the course of the year, with domestic demand spearheading the recovery. We also think that the Reserve Bank's and National Treasury's growth forecasts of two percent and 2.3 percent respectively for 2010 may be too conservative. Based on our reading of economic fundamentals, we continue to hold that rates may already have bottomed. But tomorrow is a big day, with the release of the January CPI report and Nersa's decision on electricity tariffs."

Mike Schussler, Economists.co.za:

"The 3.2 percent uptick in the Q4 GDP figure is extremely good and bodes well for an economic recovery. However, it also spells the end of the lowering of interest rates going forward."

Monale Ratsoma, Thebe Securities:

"The 3.2 percent rise in Q4 GDP didn't surprise me at all. The improvement in manufacturing tells us that the supply side of the economy is improving. However, this is not likely to be sustainable given the still lower consumer demand witnessed in retail sales recently."