South Africa’s economy has shown signs of recovery as the gross domestic product (GDP) increased by 0.8% in the second quarter. This comes after a modest rise of 0.1% in the first quarter of the year.
This places real GDP at R1.18-billion for the second quarter.
The results were released by Statistician-General Risenga Maluleke at Isibalo House in Pretoria on Tuesday.
Lagging behind G20 countries
Maluleke said South Africa’s economy has been growing below G20 countries. India showed the largest growth with 2%, followed by Brazil at 1.4% and China at 1.2% in the first quarter.
Eight industries have been identified as positive drivers of this positive growth. Mining and quarrying recorded the highest growth amongst industries. These expanded by 3.7% and added 0.2 of a percentage point to GDP. Platinum group metals (PGMs), gold, and chromium ore were the main contributions.
The manufacturing industry recorded 1.8% and contributed 0.2% to the GDP. This despite the -2 percentage point contraction seen in the last quarter.
Growth was seen in seven out of 10 manufacturing divisions. Petroleum, chemical products, and rubber and plastic products divisions, as well as the motor vehicles, parts, accessories, and transport equipment division, made the largest positive contributions.
The trade, catering, and accommodation industry had made no contributions to the industry in the first quarter. But it improved by 1.7% and contributed 0.2 of a percentage point. Increased economic activity was reported in retail trade, motor trade, accommodation, and food and beverages.
Sectors that remain stagnant
Not all industries recorded gains, as the transport, storage, and communication industry contracted by 0.8 of a percentage point.
“The negative contributors were expenditures on housing, water, electricity, gas, alcoholic beverages, tobacco, and narcotics,” said Maluleke.
On the expenditure side, household final consumption exemption (HFCE) grew by 0.8%. It contributed 0.6% to overall GDP growth. Positive growth was recorded in durable goods, semi-durable goods, and services.
Government final consumption expenditure increased by 0.7%. This contributed 0.1 of a percentage point. And this was mainly due to higher spending on goods and services and compensation of employees.
Largest negative contributors
The gross fixed capital formation, which reflects investment in fixed assets, dragged the GDP down by -0.2 percentage points after dropping by 1.4%. The largest negative contributors were other assets, down by 9.9%. Transport equipment, down by 2.3%; and non-residential buildings, which are down by 3.6%.
Maluleke further revealed that there was a build-up of R16.6-billion in inventories on a seasonally adjusted and annualised basis.
Imports fell by 2.1%, influenced by lower imports of chemical products. Also machinery and electrical equipment, mineral products, and vegetable products.
Net exports had a negative effect, contributing -0.3 of a percentage point to GDP. Exports of goods and services dropped by 3.2%.
