The South African Reserve Bank and the National Treasury were expecting GDP growth to rebound to 0.8% in 2024 on the back of nearly 300 days of no load shedding.
Image: Bhekikhaya Mabaso/Independent Newspapers
South Africa’s economy grew less than expected in 2024 but managed to dodge a technical recession after ending the year slightly higher and narrowly avoiding a technical recession in a year marked by uncertainty.
Data from Statistics South Africa (Stats SA) on Tuesday showed that real gross domestic product (GDP) increased by 0.6% in 2024, following an increase of 0.7% in 2023.
The growth outcome fell short of projections from the South African Reserve Bank and the National Treasury, which had anticipated a rebound to 0.8% this year, bolstered by nearly 300 days of uninterrupted power supply.
While the overall GDP print reflected a gentle rise, contributing sectors painted a mixed picture.
Stats SA said the 2024 GDP print was primarily led by higher economic activities in finance, real estate and business services, personal services, and electricity, gas and water.
The agriculture; construction; trade; transport; manufacturing; and general government services industries recorded negative growth in 2024.
Expenditure on GDP mirrored this growth, increasing by 0.6% in 2024, following a similar rise of 0.7% the previous year. Household final consumption expenditure (HFCE) revealed some strength, rising by 1.0%.
Growth drivers included spending on food and non-alcoholic beverages, furnishings, household equipment and maintenance, recreation and culture, health services, and restaurants and hotels. In contrast, gross fixed capital formation fell sharply by 3.7%, while changes in inventories detracted by 1.0 percentage points from the total growth.
Perhaps the most encouraging news was witnessed in the fourth quarter of 2024, where GDP saw an increase of 0.6%, bouncing back from a downwardly revised contraction of 0.1% in the third quarter.
This quarter showed a more optimistic trend with three out of ten industries reporting positive growth.
A significant highlight was the agriculture sector, which surged by 17.2%, thereby adding 0.4% to the overall GDP growth, driven by increased economic activity in field crops and animal products.
“The agriculture industry was the most significant positive contributor, increasing by 17.2% and adding 0.4% to overall GDP growth. Trade, catering and accommodation, and finance, real estate and business services also recorded positive growth,” said Bokang Vumbokani Lepolesa, chief director for national accounts at StatsSA.
“On the downside, seven industries declined. Manufacturing and transport, storage and communication were the most significant negative contributors to growth.”
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