South Africa's real gross domestic product (GDP) at market prices on a quarter-on-quarter seasonally adjusted annualised (saa) basis rose by 4.9 percent in the second quarter of 2008 from 2.1 percent in the first quarter, Statistics South Africa (Stats SA) said on Tuesday.

Non-seasonally adjusted year-on-year GDP in the first quarter was placed at 4.5 percent from 4.0 percent in the first quarter.

Growth was expected to have increased by 5.2 percent on a quarter-on-quarter saa basis according to a consensus survey undertaken by I-Net Bridge.

The range of forecasts for quarterly growth was from 2.7 percent quarter-on-quarter to 6.8 percent quarter-on-quarter.

The following are economists' reactions to the data:

Colen Garrow, Brait:

"The numbers are respectable, they are good. However they still don't change the interest rate outlook. We still need to do a lot of work to elevate these numbers."

George Glynos, ETM:

"For us the figure is a little disappointing. We were looking at a figure close to the 5.5 to 5.7 percent mark. But it seems that what caught us out is the poor growth in wholesale, retail and hotels, which surprised us to the downside. We thought there might be more resilience there.

"All in all, this still highlights the growth concerns in the economy and shows that the Reserve Bank did the right thing in holding off (with an interest rate hike)."

Chris Hart: Investment Solutions: "The latest figures emphasise that we have a two-speed economy. Some sectors face recession if they are not in recession already, but others are showing good growth. The agricultural industry for example has seen tractor sales up 50 percent despite the fall in vehicle sales. The strong upsurge in agriculture suggests that the sector is positioning itself to take advantage of high food prices.

"Mining would rebound from the first quarter after power constraints shut down mines for five days in January, and the manufacturing sector is surprisingly strong. Third quarter growth is likely to be lower. This emphasises that overall the economy is unlikely to go into recession, despite some sectors hurting."

Nicky Weimar, Nedbank:

"The numbers are stronger than we thought. The surprise however is agriculture, which looks good. The decline in retail trade was however expected."

Annabel Bishop, Investec:

"Substantial load shedding in Q1.08 was responsible for the marked slowdown in that quarter and the resultant base effect caused the sharp pick-up in growth in Q2.08.

"Excluding the base effect, Q2.08's GDP growth figure would have been closer to 3.4 percent quarter-on-quarter saa (our expected growth rate for the whole of 2008), indicative of demand continuing to wane in the face of high interest rates.

"The underlying trend of the production side of the economy shows growth is not robust enough to prove the recent Monetary Policy Committee interest rate decision to have been anything else but the correct one to take at the present time – we continue to believe interest rates will remain unchanged in H2.08 and expect a 50bp cut in April 2009."

I-Net Bridge