Trade, Agriculture, and Construction Continue to Impede South Africa’s Economic Growth, Narrowly Avoids Recession in Q4 2023

The South African economy faced challenges in various sectors, with trade, agriculture, and construction identified as primary impediments to growth, according to Stats SA. Although the nation narrowly dodged a technical recession, experiencing a meager 0.1% increase in GDP during the fourth quarter of 2023, overall economic expansion remained subdued.
While the economy exhibited a slight improvement at the close of 2023, rebounding from a contraction in the preceding quarter, the growth rate was insufficient to propel South Africa out of its muted economic state. Stats SA’s analysis of the fourth-quarter GDP results highlighted trade, agriculture, and construction as persistent drags on the nation’s economic performance.

The economic landscape in the final quarter of the year displayed a mixed picture, with certain industries driving gains. Notably, the energy-intensive mining and manufacturing sectors experienced a resurgence, benefiting from reduced instances of load shedding. Transport and finance also played pivotal roles in sustaining the economy, with the transport, storage, and communication industry expanding by 2.9%, contributing 0.2 of a percentage point to GDP growth.

Despite these positive developments, the fourth-quarter GDP figure fell short of expectations. In addition to trade, agriculture, and construction, general government services were identified as areas of weakness. The annual growth rate for 2023 now stands at a modest 0.6%, underscoring the persistent challenges and subdued nature of South Africa’s economic trajectory.