South Africa’s GDP goes up again, most industries report growth

South Africa’s Gross Domestic Product (GDP) increased by 0.6 percent in the second quarter of this year, with nine out of 10 manufacturing divisions reporting positive growth.

This increase, announced by Stats SA on Tuesday, follows the 0.4 percent growth achieved in Q1 2023.

The manufacturing industry increased by 2.2 percent in the second quarter, contributing 0.3 percent to GDP growth.

Stats SA reports that the petroleum, chemical products, rubber, and plastic products division made the largest contribution to the increase in the second quarter. The basic iron and steel, non-ferrous metal products, metal products and machinery division also made a significant contribution to the growth in this industry.

The finance, real estate, and business services industry increased by 0.7 percent in the second quarter, contributing 0.2 percent to GDP growth.

“Increased economic activities were reported for financial intermediation, insurance, and real estate activities.”

Other statistical findings for Q2 2023 are:

• Agriculture, forestry, and fishing industry increased by 4.2 percent. This was primarily due to increased economic activities reported for field crops and horticulture products.
• The personal services industry increased by 0.7 percent. Increased economic activities were reported for health and education.
• The mining and quarrying industry increased by 1.3 percent. Increased economic activities were reported for platinum group metals (PGMs), gold, other metallic minerals, and coal.

South Africa’s expenditure on GDP

While expenditure on real GDP increased by 0.6 percent in Q2 2023, the data reveals that South Africans are, however, spending less money on a number of household items. Overall, household final consumption expenditure (HFCE) decreased by 0.3 percent from Q1 2023, with declines reported for non-durable and semi-durable goods.

The data shows these to be the changes in household spending:

• Food and non-alcoholic beverages: 1.2 percent decrease
• Furnishings, household equipment, and maintenance: 2.1 percent decrease
• Housing, water, electricity, gas, and other fuels: 0.5 percent decrease
• Recreation and culture: 0.9 percent decrease

Expenditures on restaurants and hotels, transport, health and education contributed positively to growth in HFCE, while final consumption expenditure by general government increased by 1.7 percent in the second quarter. This was mainly driven by increases in goods and services and compensation of employees, Stats SA says.

Meanwhile, EY Africa chief economist Angelika Goliger says near-zero growth is expected in South Africa in 2023, reflecting power shortages.

“As per SARB, GDP is expected to decelerate to 0.4 percent while projections from the International Monetary Fund suggest 0.3 percent GDP growth in 2023 amid a rise in the intensity of power outages, soft commodity prices, and a challenging external environment,” she says.

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