South Africa’s economy showed a modest growth of 0.4% in the second quarter of 2024, according to a report released by Statistics South Africa (Stats SA).
Story Summary:
- South Africa’s GDP grew by 0.4% in the second quarter of 2024.
- Finance, trade, and manufacturing were the top-performing sectors.
- Transport, storage, and communication sectors saw a decline.
The sectors rallying South Africa’s 0.4% economic growth
This growth, while slight, is a positive indicator following a period of stagnation earlier in the year. Several key sectors contributed to this economic performance.
The finance, real estate, and business services sector was the biggest contributor, growing by 1.3% and adding 0.3 percentage points to the overall GDP growth.
This sector’s performance was driven by increased activities in financial services and real estate.
The trade, catering, and accommodation sector grew by 1.2%, largely due to increased sales in wholesale and retail trade, as well as higher demand in the accommodation industry.
This sector contributed 0.1 percentage points to the GDP.
The manufacturing sector also played a significant role, with a growth of 1.1%. This increase was mainly due to the production of motor vehicles, food and beverages, and metal products, adding another 0.1 percentage points to the GDP.
However, not all sectors performed well.
The transport, storage, and communication sector experienced a decline of 2.2%, which negatively impacted the GDP by -0.2 percentage points.
This drop was due to reduced activities in land transport and support services.
Expenditure on GDP
When looking at how money was spent within the economy (known as expenditure on GDP), household spending played a major role in the overall growth.
Household final consumption expenditure (HFCE), which includes all the goods and services that households buy, increased by 1.4%.
This was driven by higher spending on services like healthcare, and semi-durable goods like clothing, and food. This increase contributed 0.9 percentage points to the GDP growth.
The government also increased its spending, known as Government final consumption expenditure (GFCE), which rose by 1.0%. This was due to higher spending on goods, services, and employee compensation, adding 0.2 percentage points to the GDP.
However, gross fixed capital formation (GFCF), which measures investments in things like buildings, machinery, and equipment, declined by 1.4%.
This decrease subtracted 0.2 percentage points from the GDP growth, indicating that there was less investment in these areas during the quarter.
Net exports were another area of concern, as the country exported fewer goods and services (-0.4%) while imports increased by 1.7%. This resulted in a negative contribution of -0.6 percentage points to the GDP growth.
Overall growth of South Africa’s economy
The 0.4% growth in the second quarter of 2024 shows that South Africa’s economy is gradually recovering, though challenges remain.
While sectors like finance, trade, and manufacturing are showing positive signs, others like transport and investment are lagging behind.
The slight growth indicates that the country is moving in the right direction, but more needs to be done to ensure stronger and more consistent economic progress.
