Africa-Press – South-Africa. South Africa’s economic growth was slightly stronger than expected in the fourth quarter of 2021, with real gross domestic product (GDP) growing by 1.2%.
Hit by the impact of July’s civil unrest, the economy shrank by 1.7%. in the third quarter. Economists were expecting growth of around 1% in the fourth quarter.
Agriculture, forestry and fishing saw the strongest growth (+12.2%) in the fourth quarter, with personal services, trade as well as manufacturing also driving growth.
Statistics SA says good rains helped to boost agriculture activity.
“(But) the country produced less iron ore and coal in the fourth quarter, with heavy rains disrupting operations at opencast mines.”
Exports and household expenditure were among the most significant contributors to growth.
But despite the growth in the fourth quarter, the economy is still smaller than in the second quarter of 2021, before civil unrest hit the country.
The economy is also still smaller than it was in the first quarter of 2020, before the first pandemic-related lockdowns, Statistics SA says.
The economy is set to reach pre-pandemic levels over the course of the second quarter this year and is likely to
be back at the pre-pandemic trend by the December quarter, says Carmen Nel, Economist and Macro Strategist, Matrix
Fund Managers. “Both these time
estimates are sooner than was originally estimated at the height of the Covid
pandemic and strictest lockdowns.”
Statistics SA reported that the local economy grew by 4.9% in 2021, after shrinking by 6.4% in 2020.
Bloomberg reports that this is the biggest increase since 2007, and beat the 4.8% median estimate of 29 economists in a Bloomberg survey.
In 2021, mining (+11.8%) and agriculture (+8.3%) were the strongest growth sectors in the local economy.
The construction industry shrank in 2021 for the fifth consecutive year.
Sanisha Packirisamy, economist at Momentum Investments, expects South Africa’s economic growth to slow to 2% in 2022 and 1.8% in 2023.
“The Ukranian crisis, in our view, is likely to have a reasonably limited effect on local growth given a rebound in the country’s terms-of-trade and weak direct trade and investment linkages with Russia and Ukraine.”
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