South African Economic Performance
GDP, Economic growth and Inflation
Out of ten sectors, seven recorded growth, while only agriculture, mining, and transport contracted. The transport sector was the largest negative contributor, diminishing growth by 0.2%.
On the positive side, manufacturing accelerated by 1.1%, supported by improved Purchasing Managers’ Index (PMI) numbers and fewer electricity supply constraints, evidenced by a robust 3.1% growth in the electricity sector. Growth in the trade sector is also encouraging, especially after several quarters of subdued demand due to inflationary pressures, higher interest rates, and cautious consumer spending. The finance sector, which has the largest contribution to GDP, grew by 1.3%, a significant increase from the 0.2% recorded in the first quarter of 2024. This growth added an additional 0.3% to the overall economic expansion for the quarter.
Overall growth for 2024 is estimated at 0.9%, slightly higher than the 0.7% recorded in 2023, but still insufficient to significantly address South Africa’s high unemployment challenge. The new Government of National Unity (GNU), a cautiously optimistic market sentiment, and reduced loadshedding may positively impact economic activity for the remainder of 2024. If the GNU can provide clearer policy direction to address key challenges and foster business confidence, it could help spur higher economic growth—something South Africa urgently needs moving forward.
