Pretoria: South Africa’s Gross Domestic Product (GDP) decreased by 0.3% in the third quarter of 2024, following an increase of 0.3% in the second quarter of the same year. The decline in GDP reflects challenges in both supply and demand aspects of the economy.
According to South African Government News Agency, the agriculture industry was the main drag on growth on the production side, with transport, trade, and government services also contributing to the slowdown. On the expenditure side, there was a decline in imports, exports, and government consumption.
The agriculture, forestry, and fishing industry saw a significant decrease of 28.8%, contributing -0.7 percentage points to the negative GDP growth. This decline was primarily due to decreased economic activities reported for field crops. Meanwhile, the transport, storage, and communication industry decreased by 1.6%, contributing -0.1 percentage points, with decreased economic activities reported for land transport and transport support services.
The
trade, catering, and accommodation industry also faced a decline of 0.4%, with decreased activities in wholesale trade, motor trade, and food and beverages. General government services decreased by 0.1%, mainly due to decreased employment in national and provincial government and extra-budgetary institutions.
On a positive note, the finance, real estate, and business services industry increased by 1.3%, contributing 0.3 percentage points. Increased economic activities were reported for financial intermediation, insurance and pension funding, auxiliary activities, real estate activities, and other business services. The personal services and manufacturing industries also reported growth, increasing by 0.5% each, contributing 0.1 percentage points to GDP growth.
In terms of expenditure, real GDP decreased by 0.2% in the third quarter, following an increase of 0.4% in the second quarter. Household final consumption expenditure (HFCE) increased by 0.5%, contributing 0.3 percentage points to the total negative g
rowth, with notable increases in expenditures on food, non-alcoholic beverages, housing, utilities, recreation, culture, and hospitality services.
Final consumption expenditure by the general government decreased by 0.5%, mainly due to decreases in purchases of goods and services and compensation of employees. Gross fixed capital formation saw a 0.3% increase, driven by growth in other assets, construction works, and machinery and other equipment.
There was a R6.6 billion drawdown of inventories, with large decreases in the manufacturing, electricity, gas and water, and mining and quarrying industries contributing to this drawdown. Despite a decrease in exports of goods and services by 3.7%, net exports contributed positively to expenditure on GDP. Imports decreased by 3.9%, influenced by decreased trade in several categories including vehicles, mineral products, and base metals.