South Africa's GDP Grew by 0.6% Growth in Q4 2024, Driven by Agriculture and Finance Sectors

South Africa's economy showed resilience in Q4 2024, rebounding with a 0.6% GDP increase, largely fueled by strong agricultural output and steady performance in finance and trade sectors.

South Africa's gross domestic product (GDP) grew by 0.6% in the fourth quarter of 2024, marking a recovery from the 0.1% decline recorded in the third quarter. This improvement, as reported by Statistics South Africa (Stats SA), was primarily driven by robust growth in the agriculture, forestry, and fishing sectors, alongside positive contributions from finance, real estate, and business services.

Key Sectoral Contributions to GDP Growth

Agriculture, Forestry, and Fishing: This sector surged by 17.2%, contributing 0.4 percentage points to GDP growth. The increase was primarily due to heightened economic activities in field crops and animal products.

Finance, Real Estate, and Business Services: A 1.1% increase in this sector contributed 0.3 percentage points to overall GDP. Growth in financial intermediation, real estate activities, and other business services played a crucial role.

Trade, Catering, and Accommodation: This sector grew by 1.4%, adding 0.2 percentage points to GDP, supported by increased activities in wholesale trade, retail trade, and motor trade.

Sectors That Declined

Transport, Storage, and Communication: This industry contracted by 1.0%, subtracting 0.1 percentage points from GDP, mainly due to lower activity in land transport and transport support services.

Manufacturing: A 0.6% decline in this sector contributed -0.1 percentage points to GDP. Six out of ten manufacturing divisions posted negative growth, with the largest setbacks in basic iron and steel, metal products, machinery, and motor vehicle-related production.

General Government Services: Decreased by 0.5%, primarily due to reductions in employment within national and provincial governments and extra-budgetary institutions.

Electricity, Gas, and Water: Declined by 1.4%, largely attributed to reduced electricity production and consumption.

Mining and Quarrying: Fell by 0.2%, with lower activity in manganese ore and iron ore production.

Expenditure on GDP

The total real GDP expenditure rose by 0.6% in Q4 2024, following a 0.1% decline in Q3 2024.

Household Final Consumption Expenditure (HFCE): Increased by 1.0%, contributing 0.6 percentage points to GDP. The most significant growth contributors included:

Clothing and footwear: 4.4% (+0.2 percentage points)

Food and non-alcoholic beverages: 1.4% (+0.2 percentage points)

Recreation and culture: 2.5% (+0.2 percentage points)

Household equipment and maintenance: 1.9% (+0.1 percentage points)

Health: 1.2% (+0.1 percentage points)

Alcoholic beverages, tobacco, and narcotics: 1.4% (+0.1 percentage points)

Negative contributors to HFCE included spending declines in transport and restaurants/hotels.

Government Consumption Expenditure: Dropped by 0.8%, reducing GDP by 0.2 percentage points, largely due to cuts in goods and services purchases and employee compensation.

Gross Fixed Capital Formation: Declined by 0.7%, subtracting 0.1 percentage points from GDP. The largest negative contributors were:

Residential buildings: -7.5% (-0.9 percentage points)

Machinery and other equipment: -1.3% (-0.5 percentage points)

Non-residential buildings: -2.7% (-0.2 percentage points)

Inventory Drawdown: A R16.4 billion decline in inventory was observed, mainly driven by decreased stock levels in the mining and trade, catering, and accommodation industries.

Net Exports: Made a neutral contribution (0.0 percentage points) to GDP growth.

Exports of goods and services rose by 2.1%, mainly from increased trade in precious stones, metals, and chemical products.

Imports increased by 2.0%, driven by higher trade in vehicles, transport equipment, vegetable products, and machinery.

 

South Africa's economy showed resilience in Q4 2024, rebounding with a 0.6% GDP increase, largely fueled by strong agricultural output and steady performance in finance and trade sectors. However, declines in manufacturing, mining, and public sector employment indicate ongoing structural challenges. The outlook for 2025 will depend on policy measures, global economic conditions, and efforts to boost industrial and infrastructure development.