SA's Economy Rebounds with 0.6% GDP Growth, AI Investment, and Industrial Expansion

The agriculture, forestry, and fishing industry saw a remarkable increase of 17.2%, contributing 0.4 percentage points to the overall GDP growth.

South Africa’s economy showed signs of recovery with a 0.6% increase in gross domestic product (GDP) in the fourth quarter of 2024, according to Statistics South Africa (Stats SA). This marks an improvement from the 0.1% decline in the third quarter and signals positive momentum across key sectors.

Minister in The Presidency, Khumbudzo Ntshavheni, welcomed the growth, stating that the government’s efforts in economic structural reforms, enhanced service delivery, and strengthened state capacity—coupled with increased private sector participation—will drive further economic expansion in 2025 and beyond.

Sectoral Growth Contributions

The agriculture, forestry, and fishing industry saw a remarkable increase of 17.2%, contributing 0.4 percentage points to the overall GDP growth. This surge was driven by heightened economic activity in field crops and animal products.

The finance, real estate, and business services sector grew by 1.1%, contributing 0.3 percentage points. Increased activity was observed in financial intermediation, real estate transactions, and other business services.

The trade, catering, and accommodation industry also played a vital role, growing by 1.4% and adding 0.2 percentage points. This was fueled by stronger performance in wholesale trade, retail trade, and the motor trade sector.

Major Investments and Economic Prospects

Cabinet welcomed a significant R5.5 billion investment by Microsoft South Africa into artificial intelligence (AI) infrastructure. This investment strengthens South Africa’s position as a key AI hub on the African continent and follows Microsoft’s cumulative R20.4 billion investment in the country over the past three years.

Additionally, Microsoft South Africa is contributing to the development of the country’s digital workforce by funding technical certifications for 50,000 individuals in high-demand digital skills.

Further boosting South Africa’s investment profile, Indian automotive giant Mahindra signed a memorandum of understanding (MoU) with the Industrial Development Corporation (IDC) to explore establishing a full-scale vehicle assembly plant in the country. Mahindra already operates an assembly plant in Durban for its Pik Up vehicle range and recently celebrated the production of its 25,000th locally assembled unit.

National Investment Drive

The South African government continues to emphasize the importance of promoting the country as a prime investment destination. Minister Ntshavheni reminded South Africans of their collective role in advancing national economic interests in an increasingly competitive global environment. She emphasized the need for unity in defending the country’s sovereignty, constitutional democracy, and economic standing.

With economic recovery underway, major investments in AI and manufacturing, and a concerted effort to attract further business, South Africa is positioning itself for sustained economic growth in the years ahead.