SA’s economy grew 0.6% in the fourth quarter of 2024, Stats SA said on Tuesday, offering a modest rebound after a revised 0.1% contraction recorded in the third quarter. This brought full-year growth for 2024 to 0.6%, slightly lower than the 0.7% expansion recorded in 2023.
The headline figure follows an upward revision to third-quarter GDP, which was adjusted from a 0.3% contraction to 0.1% in the third quarter, largely due to adjustments in agricultural and transport data, Old Mutual chief economist Johann Els said.
The fourth-quarter figure came in at the lower end of market expectations, with economists polled ahead of the release predicting growth of 0.5%-0.9% for the quarter.
North-West University economist Raymond Parsons said the “mild recovery” in fourth-quarter 2024 GDP “confirms that the government of national unity (GNU) is right to have put much higher inclusive growth and stronger job creation as SA’s key overarching economic priorities”.
The fourth-quarter performance was driven by the agriculture, finance and trade sectors, while transport, manufacturing and general government services weighed on the overall outcome.
Agriculture, which collapsed in the third quarter (it fell 28.8%, revised to a drop of 19.7%, quarter on quarter, seasonally adjusted), jumped to 17.2%, supported by improved crop and animal product output.
This contributed 0.4 of a percentage point to GDP.
Agbiz chief economist Wandile Sihlobo said the expansion to 17.2% quarter on quarter was mainly due to the better performance of some field crops, livestock and the horticulture subsector, mainly fruit.
“The late deliveries of some field crops also helped [because the season was late], with the recovery of the livestock industry following months of widespread animal diseases,” he said. “The generally excellent fruit production due to better water levels and stable electricity that supported irrigation added positive momentum.”
Paul Makube, senior agricultural economist at FNB, noted total agriculture exports jumped 3% year on year to $13.7bn for 2024 “on the back of strong demand and better prices”.
“The agribusiness confidence index, considered the leading indicator for agriculture GDP, already signalled the turnaround in agriculture fortunes after rising by 10 points in the fourth quarter and way above the 50 points break-even level at 58 points, in the quarterly update during December,” Makube said.
Manufacturing contracted 0.6%, contributing a negative 0.1 percentage point to overall fourth-quarter GDP. Six of the10 manufacturing divisions recorded declines.
Mining decreased 0.2%, with Stats SA noting that slow economic activity was reported for manganese ore and iron ore.
Expenditure on real GDP increased 0.6% in the fourth quarter, after a decrease of 0.1% in the third quarter.
Household spending grew 1%, contributing 0.6 of a percentage point to overall growth, with notable increases in spending on clothing and footwear, food, recreation and culture, and household furnishings.
Negative contributors were expenditures on transport, restaurants and hotels.
Government expenditure decreased 0.8%, driven by lower employment, including decreases in purchases.
Gross fixed capital formation fell 0.7% after a modest 0.3% rise in the third quarter, with residential buildings, machinery and nonresidential buildings all declining. There was a R16.4bn drawdown of inventories (seasonally adjusted and annualised value), Stats SA reported.
Large decreases in mining and trade, catering and accommodation contributed to the inventory drawdown.
Net exports made a neutral contribution (0 percentage points) to expenditure on GDP. Exports of goods and services increased 2.1%, largely influenced by increased trade in pearls, precious and semi-precious stones and precious metals, and chemical products.
The modest full-year growth of 0.6% confirms that SA’s economy once again expanded at a rate far below population growth, meaning GDP per capita is likely to have declined further, leaving South Africans worse off in real terms.
In 2024, household final consumption expenditure increased 1%, contributing 0.7 of a percentage point to total annual expected growth.
Positive contributions came from expenditures on food and nonalcoholic beverages, furnishings, household equipment and maintenance, recreation and culture, health, restaurants and hotels, and communication.
Net exports contributed 1.3 percentage points to the total growth in expenditure on GDP.
On the agricultural front, Sihlobo noted that the sector contracted 8% year on year in 2024, from minus 4.8% in 2023.
“This annual contraction is broadly in line with market expectations,” he said. The primary challenge of SA’s agriculture in 2024 was the midsummer drought that weighed on field crop production, combined with the livestock diseases in the first few quarters of the year.”
Gross fixed capital formation decreased 3.7%, subtracting 0.5 of a percentage point, while changes in inventories contributed a 1 percentage point decline to total growth.
“Fixed capital formation remains a weak link in SA’s slow and uneven economic recovery, as it is still only at about 15% of GDP instead of the National Development Plan’s target of 25%-30%,” Parsons said.
“Household spending has done most of the ‘heavy lifting’ in SA’s economic upturn so far. Higher sustainable growth also helps to create the economic buffers and resilience needed to mitigate any external shocks caused by elevated global uncertainty.”
Update: March 4 2025
The article has been updated with more information and reactions to the data.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.