Agricultural sector saves South African economy from technical recession
South Africa’s economy slowed for a third straight year in 2024, but dodged a techical recession as the agricultural sector rebounded.
South Africa’s economy worryingly slowed for a third straight year in 2024, but dodged a recession in the final quarter as the agricultural sector rebounded following a drought, official data showed.
The country’s gross domestic product (GDP) expanded 0.6 percent last year compared to 0.7 percent in 2023, according to the StatsSA statistics agency.
The economy has been slowing for three straight years after bouncing back from the Covid pandemic in 2021.
Avoided a technical recession
But South Africa avoided a technical recession – defined as two straight quarters of contraction – as it grew 0.6 percent between October and December compared to the third quarter, when it shrank by 0.1 percent.
The government said the growth was “encouraging and signals a welcome recovery”.
The fourth-quarter growth was mainly driven by the agriculture, finance and trade sectors.
The agricultural sector grew 17.2 percent in the fourth quarter, contributing to 0.4 percentage points of total growth, StatsSA said.
The drought had caused a big drop in agricultural production in the third quarter.
The Democratic Alliance (DA) party, a coalition partner in the Government of National Unity (GNU), said the figures showed a “stagnant” economy.
“Unless urgent action is taken, the country will continue to slide deeper into economic decline,” it said.
“South Africans are getting poorer year after year,” it said.
The party is in a tug-of-war with the ruling African National Congress (ANC) over a proposal to increase the value-added tax to fund the national budget.
The disagreement last month delayed the unveiling of the budget, but a new date has been set for March 12.
South Africa’s inflation rose to 3.2 percent in January.
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