By Kopano Gumbi
PRETORIA (Reuters) -South Africa’s economy returned to modest growth in the fourth quarter of last year, helped by a recovery in agricultural output after the sector triggered a contraction in the previous quarter.
But the 0.6% gross domestic product (GDP) expansion in seasonally-adjusted, quarter-on-quarter terms was smaller than the 0.9% predicted by economists , as only three of the 10 industries tracked by Statistics South Africa grew.
“While growth is positive, South Africa’s economic recovery remains fragile with sectoral performances mixed,” said Shaun Murison, senior market analyst at IG.
Agriculture expanded 17.2% in the fourth quarter on the back of increased activity in field crops and animal products.
“Agriculture is always a wildcard, heavily influenced by increasingly erratic and extreme weather events,” said Nicky Weimar, chief economist at Nedbank.
Trade grew 1.4% and finance 1.1% in the last three months of 2024.
However, manufacturing shrank 0.6%, mining dropped 0.2% and construction fell 0.4%.
Fourth-quarter GDP grew 0.9% on a year-on-year basis, while for 2024 as a whole it rose 0.6%.
Bokang Vumbukani-Lepolesa, chief director for national accounts at Stats SA, said withdrawals under last year’s “two-pot” pension reform had lifted household spending towards the end of the year.
Economists predict the economy will accelerate modestly in 2025, boosted by stronger consumer confidence and a recovery in real household incomes thanks to low inflation and falling interest rates.
But despite improved power availability in the past year and optimism that the ruling coalition government will seek to push through growth-enhancing reforms, the operating environment is expected to remain challenging for many businesses.
The statistics agency revised down its estimate of the third-quarter contraction to 0.1%.
(Reporting by Kopano Gumbi;Additional reporting by Tannur Anders and Sfundo Parakozov;Editing by Alexander Winning and Sharon Singleton)
