Question

The information in the table below shows the national accounts figures for South Africa between 2015 and 2016. Use the information to answer the questions that follow:

1.1. Calculate gross domestic product (GDP) for 2015 and 2016 ?

1.2Calculate the economic growth rate between 2015 and 2016

1.3Calculate the net exports for the year 2015 and comment on the effect of this figure on economic growth in South Africa.

1.4Calculate net domestic product for the year 2016.

1.5Calculate net national product for the year 2016.

Component	2015 (R millions)	2016 (R millions)
Final consumption expenditure by households	1 853 657	1 864 436
Final consumption expenditure by general government	614 957	628 434
Gross capital formation	655 457	602 458
Exports of goods and services	909 345	912 546
Imports of goods and services	966 025	928 730
Primary income from the rest of the world	98 016	87 773
Primary income to the rest of the world	198 382	208 243
Consumption of fixed capital	433 604	445 724

Answer 1

1.1

GDP = C + I + G + X - M

GDP, 2015 = 1853657 + 655457 + 614957 + 909345 - 966025 = 3067391

GDP, 2016 = 1964436 + 602458 + 628434 + 912546 - 928730 = 3179144

1.2

Growth rate = % change in GDP = (3179144 / 3067391) - 1 = 1.0364 - 1 = 0.0364 = 3.64%

1.3

NX = X - M = 909345 - 966025 = - 56680

Since net export is negative, this slows down economic growth rate.

1.4

NDP, 2016 = GDP - Consumption of fixed capital = 3179144 - 445724 = 2733420

1.5

NNP, 2016 = NDP + Primary income from the rest of the world - Primary income to the rest of the world

= 2733420 + 87773 - 208243 = 2612950