South Africa GDP grows above expectations

South Africa’s GDP growth in the fourth quarter of 2015 was higher than expected – but not by much.

Gross Domestic Product for the 4th quarter of 2015 came in at 0.6% year-on-year, above expectations of 0.5%, according to Stats SA.

This was boosted by an increase in economic activity in the wholesale, retail and motor trade; catering and accommodation industry and finance, real estate and business services during the quarter..

Full year growth was at 1.3% – on par with the latest estimates from government, and higher than previous projections of 1.1% or 1.2%. The nominal GDP at market prices in 2015 was R4 trillion – R194 billion more than in 2014.

South Africa is expected to face a tough economic year, with growth for 2016 expected to be under 1%. The IMF and the World Bank expect growth at 0.7% and 0.6%, respectively, while the SA government anticipated growth at 0.9% – down significantly from previous projections of 1.7%.

The main contributors to the increase in economic activity in 2015 were finance, real estate and business services (0.6 of a percentage point), the mining and quarrying industry and the wholesale, retail and motor trade; catering and accommodation industry (each contributing 0.2 of a percentage point).

A negative contribution was recorded by the agriculture, forestry and fishing industry (-0.2 of a percentage point).

These were the growth markets in the South African economy in 2015:

  • Finance, real estate and business services expanded by R44 billion to R744 billion;
  • General government services expanded by R40 billion to R618 billion;
  • The wholesale, retail and motor trade; catering and accommodation industry expanded by R30 billion to R535 billion;
  • The transport, storage and communication industry expanded by R14 billion to R354 billion; and
  • The manufacturing industry expanded by R11 billion to R463 billion.

Structure of the economy

The largest industries, as measured by their nominal value added in 2015, were as follows:

  • Finance, real estate and business services – 20.9%;
  • General government – 17.4%;
  • Wholesale, retail and motor trade; catering and accommodation – 15.0%; and
  • Manufacturing – 13.0%.

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South Africa GDP grows above expectations