South Africa’s economy posted modest growth in the final quarter of 2024, mainly supported by a sharp rebound in agricultural output, according to official data released on Monday. The country’s gross domestic product (GDP) expanded by 0.6% in seasonally adjusted, quarter-on-quarter terms, falling short of the 0.9% expansion anticipated by economists. Only three of the ten major sectors tracked by Statistics South Africa managed to post positive growth during the quarter, highlighting the continued fragility of the broader economic recovery.
The agricultural sector was the clear outperformer, surging by 17.2% in the fourth quarter compared to the previous three months. Increased activity in field crop production and livestock farming underpinned the strong performance. Agriculture’s recovery helped reverse the negative momentum experienced earlier in the year, when erratic weather conditions had weighed heavily on output. Analysts, however, cautioned that the sector remains highly vulnerable to extreme and increasingly unpredictable weather patterns. “Agriculture is always a wildcard, heavily influenced by increasingly erratic and extreme weather events,” said Nicky Weimar, chief economist at Nedbank.
Beyond agriculture, growth was limited to the trade and finance sectors, which expanded by 1.4% and 1.1%, respectively. Other industries weighed on overall growth. Manufacturing output declined by 0.6%, mining activity contracted by 0.2%, and construction fell by 0.4%, reflecting persistent challenges that include weak demand, infrastructure bottlenecks, and regulatory uncertainty. “While growth is positive, South Africa’s economic recovery remains fragile with sectoral performances mixed,” said Shaun Murison, senior market analyst at IG.
On an annualized basis, fourth-quarter GDP grew 0.9% compared to the same period in 2023. For the full year 2024, the economy expanded by just 0.6%, underscoring the sluggish pace of recovery following years of structural challenges, energy supply disruptions, and a difficult global economic environment. Statistics South Africa also revised down its estimate for the third-quarter contraction from an initial 0.2% to 0.1%, suggesting that the economy performed slightly better than previously thought during that period.
A notable boost to household spending at the end of 2024 helped support consumer-facing sectors. According to Stats SA, withdrawals from pension savings under the government’s newly implemented “two-pot” retirement system provided households with additional liquidity, leading to higher consumption levels in the final months of the year. “Withdrawals under last year’s ‘two-pot’ pension reform had lifted household spending towards the end of the year,” said Bokang Vumbukani-Lepolesa, chief director for national accounts at the agency.
Looking ahead, economists forecast a slight acceleration in economic growth during 2025. Expectations of more substantial consumer confidence, a recovery in real household incomes driven by easing inflation, and the prospect of lower interest rates are likely to provide modest tailwinds. Improvements in the country’s energy supply situation, following progress in reforms at the state utility Eskom and increased private sector investment in renewable energy, are also seen as encouraging signs for business operations.
Analysts are cautiously optimistic that the ruling coalition government will prioritize growth-enhancing reforms, including infrastructure investment, labor market flexibility, and measures to boost private-sector participation. Nonetheless, significant risks to the outlook persist. Structural constraints such as high unemployment, skills shortages, regulatory bottlenecks, and concerns about policy consistency remain barriers to sustained, inclusive economic growth.
“While there are green shoots of recovery, the operating environment remains challenging for many sectors,” Murison added. Small and medium-sized enterprises continue to face headwinds stemming from logistics inefficiencies, crime, and policy delays. Additionally, the global economic environment, including weaker demand from key trading partners, may further pressure South Africa’s exports in the coming year.
Although the modest fourth-quarter growth provides some reassurance that the economy remains on a recovery trajectory, the mixed sectoral performances and underlying vulnerabilities suggest that achieving robust and sustained growth will require concerted policy action and investment over the medium term. Without meaningful reforms, analysts warn that South Africa risks falling into a pattern of low growth, high inequality, and limited job creation, further exacerbating social and economic challenges.
