The agriculture sector was up 17.2% and was the largest contributor to GDP growth during the period. (Photo by Mujahid Saofodien/AFP)
South Africa’s economy expanded by 0.6% in the last three months of 2024, following a 0.1% contraction in the previous quarter, largely driven by growth in the agricultural sector.
Three industries recorded positive growth between the third and last quarter of 2024, according to data published by Statistics South Africa on Tuesday.
Agriculture grew by 17.2% — contributing 0.4 percentage points to the overall fourth quarter number — largely due to increases for field crops and animal products.
The trade industry registered a 1.4% increase, adding 0.2 percentage points to GDP, while finance rose 1.1% and contributed 0.3 percentage points.
On the flip side, the transport sector was the largest negative contributor, decreasing by 1.0% and detracting 0.1 percentage points from growth, Stats South Africa said.
Government final consumption expenditure decreased by 0.8%, while gross fixed capital formation decreased by 0.7%, during the quarter.
The mining and quarrying industry contracted by 0.2%, due to subdued economic activities for manganese and iron ore.
Economists at Nedbank said the value added by mining and manufacturing contracted in the fourth quarter, adding that this persistent weakness highlighted the underlying challenges prevalent in the operating environment of the sectors.
Stats SA said the economy grew by 0.6% for the whole of 2024, compared with an increase of 0.7% the previous year.
“The annual increase in real GDP … was primarily led by higher economic activities in finance, real estate and business services … personal services … and electricity, gas and water,” the agency said.
The agriculture, construction, trade, transport, manufacturing and the general government services industries recorded negative growth last year.
Nedbank predicted growth of 1.4% in 2025 and 1.5% on average over the next three years. However, the bank warned that the threat of a global trade war and the potential for South Africa to be cut off as a beneficiary of the African Growth and Opportunity Act, which allows duty-free export access to American markets, posed significant downside risks.
“The main boost will come from domestic demand, supported by firmer consumer confidence, a recovery in real household incomes driven by lower inflation, and lower debt services costs as interest rates ease,” the bank said in a statement.
“Despite minor progress on the structural front, operating conditions remain challenging and production costs high.”