South Africa’s economy grew slightly in the second quarter of 2024, a recovery aided by no load-shedding, after remaining flat in the first quarter, data released on Tuesday showed.
According to Statistics South Africa, GDP expanded by 0.4% in the period under review after failing to grow in the first three months of the year, a period that was still marked by power outages. Stats SA revised the first quarter number up slightly, having earlier reported a 0.1% contraction.
There was no load-shedding in the second quarter, which helped the electricity, gas and water supply industry. The sector increased by 3.1%, driven by higher electricity generation and water distribution, according to Stats SA.
The country has had 161 straight days without power cuts and only 83 days of load-shedding this year, according to The Outlier.
“If we ignore the topsy-turvy economic environment caused by the pandemic in 2020, the 3.1% growth rate represents the sharpest 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 catering, as well as construction.
The 0.4% expansion matched Standard Bank’s forecast for the second quarter and was also supported by some improvements in the logistics sector, particularly in the railway and port operations, head of South Africa macroeconomic research Elna Moolman said in a note.
“Most sectors expanded so this was a broad-based expansion,” she said, noting that towards the end of the quarter there were key political developments with the formation of a government of national unity (GNU) after 29 May general elections and the appointment of the new cabinet.
“Since then the economic prospects have generally improved,” Moolman added.
Ahead of Tuesday’s GDP data release, economists at Nedbank predicted that the worst of the economic downturn was over, and also correctly forecast 0.4% growth for the second quarter.
“We expect the economy to fare better in the second half of the year,” the bank said, adding that resolving the country’s energy and logistical constraints remained the key to unlocking faster growth over the medium to longer term.
“While the GNU has ushered in renewed optimism, this needs to translate into accelerated structural reforms to enhance the international competitiveness of industry, thereby enabling the economy to grow faster and create more jobs without hitting supply bottlenecks, driving up costs and stoking inflation,” Nedbank said.