South African economy records fourth consecutive quarter of growth

The South African economy recorded its fourth consecutive quarter of growth, expanding by 1.2% in the second quarter of 2021. This followed a revised 1.0% rise in the first quarter of the year.

The transport, storage and communication industry increased by 6.9% in the second quarter and made the largest contribution to Gross Domestic Product (GDP) growth, namely 0.5 percentage points, data from StatSA showed.

Increased economic activity was reported for land transport and communication services.

The personal services industry increased by 2.5% and contributed 0.4 of a percentage point to GDP growth. Increases were reported for community services and other producers, the stats body said.

The trade, catering and accommodation industry increased by 2.2% and contributed 0.3 of a percentage point to GDP growth. Increased economic activity was reported in wholesale, retail and motor trade, and there was increased spending on catering and accommodation services.

The agriculture, forestry and fishing industry increased by 6.2% and contributed 0.2 of a percentage point to GDP growth. The increase was mainly due to increased production of field crops, horticulture and animal products, Stats SA said.

The mining and quarrying industry increased by 1.9% and contributed 0.1 of a percentage point to GDP growth. Increased production was reported for platinum group metals (PGMs), gold and coal.

Unadjusted real GDP for the first six months of 2021 increased by 7.5% compared with the first six months of 2020. StatsSA said that by Q2: 2021, economic activity had returned to a level last seen in Q4: 2017.

Transport and agriculture recorded the highest growth rates in Q2: 2021

Expenditure on real gross domestic product increased by 1.2% in the second quarter of 2021. The stats body said that household final consumption expenditure increased by 0.5% in the second quarter, contributing 0.3 of a percentage point to total growth. The highest growth rates and largest contributors were seen in durable and non-durable goods.

The main positive contributors to growth in HFCE were expenditures on transport (2.7% and contributing 0.4 of a percentage point); health (2.5% and contributing 0.2 of a percentage point); food and non-alcoholic beverages (1.7% and contributing 0.2 of a percentage point); restaurants (2.4% and contributing 0.1 of a percentage point); communication (1.6% and contributing 0.1 of a percentage point); and clothing and footwear (1.1% and contributing 0.1 of a percentage point).

A negative contribution to growth in HFCE was reported for expenditures in the ‘other’ category, decreasing by 3.8% and contributing -0.5 of a percentage point, mainly because of lower spending on insurance services in the second quarter, StatsSA said.

Imports of goods and services increased by 0.4%, driven largely by increases in mineral products; base metals and articles of base metals; and animal and vegetable fats and oils.

Nominal GDP meanwhile, was estimated at R1.53 trillion in Q2: 2021. This was up by R76 billion compared with Q1: 2021, StatsSA said.

Finance (23%) is the largest industry in South Africa, followed by personal services (17%), the data shows. Trade (14%), manufacturing (13%) and mining (9%) follow. Government accounts for 8%, transport for 7%, and electricity, gas and water 3%.


Read: Revised GDP data for South Africa adds R550 billion to estimates

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South African economy records fourth consecutive quarter of growth