By Phenyo Selinda
South Africa’s economy showed signs of resilience in the second quarter of 2024, with the Gross Domestic Product (GDP) increasing by 0.4%. This growth, as reported by Statistics South Africa (Stats SA), comes after a stagnant first quarter and highlights the pivotal role played by the finance, real estate, and business services sectors in driving the country’s economic performance.
Key Contributors to GDP Growth
The finance, real estate, and business services industry were the standout performers, growing by 1.3% and contributing 0.3 percentage points to the overall GDP growth. This sector’s growth was underpinned by increased activities in financial intermediation, real estate, and other business services. The trade, catering, and accommodation industry also recorded positive growth, rising by 1.2% and adding 0.1 percentage points to the GDP. This was largely driven by wholesale and retail trade, along with a boost in the accommodation sector.
Manufacturing, a critical pillar of South Africa’s economy, expanded by 1.1%, contributing an additional 0.1 percentage points. The growth in this sector was broad-based, with notable contributions from the automotive industry, food and beverage production, and the basic iron and steel sectors. These gains were supported by the absence of load-shedding during the quarter, a significant improvement compared to the disruptions seen in the previous period.
Challenges and Declines
Despite these positive trends, some sectors faced challenges. The transport, storage, and communication sector experienced a contraction, contributing negatively by 0.2 percentage points to GDP growth. This decline was primarily driven by reduced activity in land transport and related services. Similarly, the agriculture, forestry, and fishing industry saw a decrease of 2.1%, negatively impacting GDP by 0.1 percentage points. The decline in this sector was attributed to lower output in field crops and animal products.
Expenditure on GDP and Household Consumption
In terms of expenditure, GDP grew by 0.5% in the second quarter, following a slight decline in the first quarter. Household final consumption expenditure (HFCE) rose by 1.4%, contributing 0.9 percentage points to GDP growth. This increase was driven by higher spending on services, semi-durable goods, clothing, footwear, and food and non-alcoholic beverages.
Final consumption expenditure by the general government also grew by 1.0%, contributing 0.2 percentage points to GDP growth. This was largely due to increased spending on goods and services, as well as employee compensation.
However, a notable challenge was the decline in exports, which fell by 0.4% during the quarter. This decline was mainly due to reduced trade in vegetable products, mineral products, and vehicles. On the other hand, imports grew by 1.7%, driven by increased trade in vehicles, transport equipment, and textiles.
The Path Forward
While the second quarter’s growth is a positive sign, experts caution that sustained recovery will require ongoing structural reforms and the resolution of persistent issues such as energy supply and logistical constraints. The recent improvements in logistics, particularly in railway and port operations, have been noted as positive developments. However, the broader economic outlook remains contingent on addressing these key areas to unlock faster growth and job creation.
The growth in Q2 2024, though modest, represents a crucial step towards stabilizing South Africa’s economy amidst a complex global environment. The absence of load-shedding and the formation of a government of national unity following the May 2024 general elections have contributed to a more favorable economic climate, although challenges remain.
Download Here:
Read all our publications on magzter:
https://www.magzter.com/ZA/Central-News-Pty-Ltd/Central-News/Newspaper/All-Issues
Central News also offers Sponsored Editorial Content, Podcasts , Radio / Social Media Simulcast, Video Production , Live Streaming Services, Press Conferences, and Paid Interviews (Video/Audio) etc.
We guarantee exceptional exposure, reach, and engagement, with an excellent return on investment.
Advertisement:
To place your advert on our platforms (Print Newspaper or Digital Platforms) : Please email : sales@centralnews.co.za
For Business Related:
business@centralnews.co.za
Newsroom:
Send your Stories / Media Statements To: newsroom@centralnews.co.za
General Info:
info@centralnews.co.za
Office Administrator:
admin@centralnews.co.za
Whatsapp / Call: 081 495 5487
Website: https://www.centralnews.co.za
Social Media Platforms (@centralnewsza) : Linkedin, Facebook, Tiktok, Twitter, Instagram, Youtube
#centralnewsza #freestate