The country’s gross domestic product (GDP) increased by 1.6% in the third quarter after contracting by 0.7% in the second quarter, Statistics South Africa (Stats SA) said on Tuesday.
The 1.6% increase restores the economy to pre-pandemic levels, according to Stats SA, which said quarterly real GDP is now the highest it has ever been.
“The size of the economy now exceeds pre-pandemic levels. Real gross domestic product, measured by production, was R1 161-billion [constant 2015 prices] in the third quarter, which is above the previous peak of R1 152-billion recorded in the fourth quarter of 2018,” said the national statistical service.
Agriculture, finance, transport and manufacturing industries were the main drivers of growth on the supply side while the demand side was lifted by a rise in exports and government consumption.
Eight industries recorded an increase in economic activity during the quarter, including agriculture, forestry and fishing, transport, construction, mining, finance real estate and business services, manufacturing, trade, as well as general government services.
According to Stats SA, the agriculture and finance and transport industries helped push the GDP higher. The agriculture, forestry and fishing industries being the biggest positive contributor increased by 19.2% in the quarter, contributing 0.5 of a percentage to GDP growth.
“This was mainly associated with a rise in the production of field crops and horticulture products.”
The second biggest positive contributor was the finance real estate and business services industry, which expanded by 1.9% in the third quarter, contributing 0.5 of a percentage point to GDP growth.
“Because this is the largest industry in the economy, contributing almost a quarter of value added, a change in its fortunes typically has a noticeable impact on GDP. Growth in the third quarter was driven by financial intermediation, insurance and pension funding, auxiliary activities, and real estate and other business services,” said Stats SA.
The manufacturing industry, as a third positive contributor, increased by 1.5%, contributing 0.2 of a percentage to GDP growth. According to Stats SA, output was bolstered by the automotive sector, food and beverages, as well as metal products.
“On the downside, the personal services and electricity, gas and water supply industries contracted in the third quarter.”
It explained further: “Stats SA also measures the expenditure side of GDP, providing an indication of total demand in the economy. This includes measures of household consumption, government consumption, investment [gross fixed capital formation and changes in inventories], and net exports.
“Exports increased by 4.2% in the third quarter, driven mainly by increased trade in mineral products, metals, vegetable products and paper products. The rise in government consumption was led by increased spending on goods and services.”
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