**South Africa Economic Growth: The Momentum of a Robust Economic Recovery**
South Africa’s economy grew modestly in the second quarter of 2024, a recovery supported by the absence of load shedding, after remaining stagnant in the first quarter, data showed on Tuesday.
According to Statistics South Africa, GDP expanded by 0.4% during the period under review, after failing to grow in the first three months of the year, a period that was still marked by power cuts. Stats SA revised the first quarter figure slightly, having initially reported a contraction of 0.1%.
There were no load shedding in the second quarter, benefiting the electricity, gas and water supply sectors. The sector grew 3.1%, boosted by an increase in electricity generation and water distribution, according to Stats SA.
The country has recorded 161 consecutive days without power cuts and only 83 days of load shedding this year, according to The Outlier.
“If we ignore the turbulent economic environment caused by the pandemic in 2020, the 3.1% growth rate represents the highest increase since the third quarter of 2008 [also 3.1%],” Stats SA said in a statement.
Seven out of 10 industries contributed to the positive second-quarter data, including finance, real estate and business services, manufacturing, trade, accommodation and food services, and construction.
The 0.4% expansion was in line with Standard Bank’s forecast for the second quarter and was also supported by some improvements in the logistics sector, particularly in rail and port operations, South Africa’s head of macroeconomic research Elna Moolman said in a note.
“Most sectors have expanded, so this is a broad-based expansion,” she said, noting that at the end of the quarter there were key political developments with the formation of a Government of National Unity (GNU) following the May 29 general election and the appointment of the new cabinet.
“Since then, the economic outlook has generally improved,” Moolman added.
Ahead of Tuesday’s GDP data, Nedbank economists had predicted that the worst of the economic downturn was behind us and had also correctly forecast growth of 0.4% for the second quarter.
“We expect the economy to perform better in the second half of the year,” the bank said, adding that addressing the country’s energy and logistics constraints remained key to unlocking faster growth in the medium to long term..
“While the GNU has generated renewed optimism, this must be translated into accelerated structural reforms to improve the international competitiveness of the industry, allowing the economy to grow faster and create more jobs without encountering supply bottlenecks, which would push up costs and boost inflation,” Nedbank said.
South Africa’s economic growth appears to be on the upswing, and the outlook for the country is more encouraging. The absence of load shedding, the diversification of sectors contributing to growth, and the positive signs emerging from the country point to a promising future for the South African economy.
Recovery in an uncertain global environment offers opportunities for growth and prosperity for South Africa, and consolidating efforts to strengthen key sectors of the economy could pave the way for a period of sustained growth and sustainable development.