South Africa’s economy scrapes by with 0.1% growth at the end of 2023

South Africa’s gross domestic product (GDP) increased by 0.1% in the fourth quarter of 2023, meaning the country’s economy grew by around 0.6% in 2023.

StatsSA released South Africa’s GDP data today, which revealed that South Africa’s economy grew marginally in the fourth quarter of 2023 after shrinking by 0.2% in Q3. 

According to the latest preliminary indicators, real GDP increased by 0.6% in 2023, significantly down from 1.9% in 2022.

The annual increase in real GDP of 0.6% in 2023 was primarily led by higher economic activities in finance, real estate and business services.

The agriculture, forestry and fishing, trade, catering and accommodation, electricity, gas and water, and mining and quarrying divisions recorded negative growth in 2023.

Industry breakdown for Q4 2023

The transport, storage and communication industry increased by 2.9% in the fourth quarter, contributing 0.2 of a percentage point to Q4 GDP growth. 

Increased economic activities were reported for land transport, air transport, transport support services and communications.

The mining and quarrying industry increased by 2.4% in the fourth quarter, contributing 0.1 of a percentage point.

Increased economic activities were reported for platinum group metals (PGMs), coal, chromium ore and diamonds.

The personal services industry increased by 0.9% in the fourth quarter, contributing 0.1 of a percentage point. Increased economic activities were reported for health and education.

The finance, real estate and business services industry increased by 0.6% in the fourth quarter of 2023, contributing 0.1 of a percentage point. 

Increased economic activities were reported for financial intermediation, auxiliary activities, real estate activities and business services.

The trade, catering and accommodation industry decreased by 2.9% in the fourth quarter of 2023, contributing -0.3 of a percentage point. 

Decreased economic activities were reported for wholesale trade, retail trade, motor trade, accommodation and food and beverages.

The agriculture, forestry and fishing industry decreased by 9.7% in the fourth quarter of 2023, contributing -0.2 of a percentage point to GDP growth. 

This was primarily due to decreased economic activities reported for field crops, animal products and horticulture products.

Expenditure in Q4 2023

Expenditure on real GDP increased by 0.1% in the fourth quarter of 2023.

Household final consumption expenditure (HFCE) also increased by 0.2% in the fourth quarter, contributing 0.1 of a percentage point to total growth. Increases were reported for durable goods and services.

The main positive contributors to the increase in HFCE were expenditures on the ‘other’ category, transport and communication.

The main negative contributors were expenditures on housing, water, electricity, gas and other fuels; food and non-alcoholic beverages; clothing and footwear; and restaurants and hotels.

Final consumption expenditure by the general government decreased by 0.3% in the fourth quarter, mainly driven by decreases in purchases of goods and services and compensation of employees.

Total gross fixed capital formation decreased by 0.2% in the fourth quarter. The main negative contributors to the decrease were residential buildings, transport equipment, construction works and machinery and other equipment.

There was a R7.5 billion build-up of inventories in the fourth quarter of 2023. Large increases in three industries – manufacturing, trade, catering and accommodation – and electricity, gas and water contributed to the inventory build-up.

Net exports contributed negatively to expenditure on GDP in the fourth quarter. 

Exports of goods and services increased by 0.6%, largely influenced by increased trade in prepared foodstuffs, beverages and tobacco, vegetable products, chemical products, and base metals and articles of base metals.

Imports of goods and services increased by 4.0%, largely influenced by increased trade in mineral products, chemical products, and vegetable products.