South Africans splashed out more on clothing and footwear, food and non-alcoholic beverages, recreation, culture and household goods last year amidst reports of a 0,6% GDP expansion in the fourth quarter of last year.
“The data suggests that consumers might have more breathing space than they did a year ago. In real terms, households spent 2,3% more in the fourth quarter of 2024 compared with the fourth quarter of 2023. The trade industry increased its size by 1,6% over the same period,” Statistics SA revealed in its 2024 fourth quarter report this week.
The authority revealed that GDP expanded by 0,6% in the fourth quarter, between October and December. Stats SA further noted that the economy witnessed a R16,4-billion draw down in inventories, “in part due to the trade industry accelerating efforts to meet demand that exceeded supply”.
But trade union federation Saftu has poured cold water on reports of the 0,6% expansion.
“The 0.6% growth rate exposes the fallacy that budget cuts will stimulate economic recovery. In reality, they are a death sentence to economic expansion,” said secretary-general Zwelinzima Vavi in reaction.
“By slashing spending on critical services like health, education, and policing, the government is not only eroding essential public services but also shrinking overall demand in the economy,” he said.
Vavi further criticised government’s plans to increase VAT, saying “reliance on regressive taxation measures like VAT hikes to address the fiscal crisis is unacceptable”.
“Increasing VAT does not address the structural problems in the economy, instead, it further burdens the poor, who already bear the brunt of economic mismanagement. The fundamental issue is not a lack of revenue but a refusal to tax the wealthy and overhaul an economy built on colonial patterns of wealth accumulation.”
The authority revealed that “following a contraction of 0,1% in the third quarter of 2024, the South African gross domestic product expanded by 0,6% in the fourth quarter (October–December)”.
According to Stats SA the “growth was led by agriculture, finance and trade on the supply (production) side of the economy”.
“The trade industry expanded on the back of increased retail, wholesale and motor trade sales. This reflected positively on the demand side of the economy, with household consumption spending rising in the fourth quarter.”
