South Africa’s economy declined more than expected in the fourth quarter of 2022.
After rallying in the third quarter of 2022, South African gross domestic product (GDP) declined by 1.3% in the fourth quarter (October‒December). Economists anticipated a decline of 0.4%.
According to Stats SA, growth was dragged lower mainly by finance, trade, mining, agriculture, manufacturing, and general government services.
Seven of the ten industries contracted in the fourth quarter. The finance, real estate & business services industry shrank by 2.3%. This was on the back of lower economic activity in financial intermediation, insurance & pension funding, and auxiliary activities.
As the finance, real estate & business services industry is the largest in the South African economy, the 2.3% decrease was the biggest factor behind the decline in GDP, subtracting 0.6 of a percentage point from GDP growth.
The trade, catering & accommodation industry was the second largest negative contributor to growth, recording a contraction of 2.1%. This was mainly due to a decline in wholesale trade, Stats SA said.
Mining output was dragged lower by a decline in the production of diamonds, iron ore, and platinum group metals (PGMs).
Economic activity in the electricity, gas & water supply industry was hampered by lower levels of production and consumption of electricity – mainly due to load shedding – and water.
Agriculture recorded the largest contraction in the quarter (-3.3%), pulled lower mainly by weaker production figures for field crops and horticulture products
On the positive side, transport, storage & communication, construction, and personal services were the bright spots in the fourth quarter.
Transport, storage & communication made the largest positive impact, rising by 0.7% and contributing 0.1 of a percentage point to growth. This was mainly due to increased economic activity in passenger land transport, air transport, and communication services.
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