South Africa's GDP Expands By 0.6% In Second Quarter

Government agency Statistics South Africa (Stats SA) announced that the country's GDP has expanded by 0.6 percent in the second quarter of 2023 (April to June).

Stats SA disclosed on Tuesday that on the demand side, South Africa gained a huge benefit from a rise in investments in machinery and equipment including products related to renewable energy.

While there has been a decline in overall household consumption, consumers continued to spend more on restaurants and hotels. Furthermore, manufacturing production has been expanded by 2.2 percent, which has mainly been pushed higher by petroleum, chemical products, rubber, and plastic products.

"Manufacturers in metals, metal products, machinery, and equipment also recorded a good quarter, driven in part by increased demand for crude steel," as per the stats, SA News reported. "Increased investment in South Africa's automotive sector helped lift the production of transport equipment and motor vehicles."

It added, "The finance industry edged higher by 0.7%, boosted by financial intermediation, insurance and real estate services."

It is worth noting that South Africa recorded two consecutive quarters of decline in the agriculture sector, which has also improved in this quarter by 4.2 percent due to increased production of field crops and horticulture products.

Moreover, favorable weather conditions across the country have hiked cultivation and raised the export demand. The stats disclosed that mining also "looked good" as it showed growth in various categories including metals, gold, minerals, other metallic minerals, and coal.

"The personal services industry was positive on the back of higher growth in education and health," the agency mentioned. "The rise in general government services was mainly due to an increase in staff numbers."

The government agency admitted that not all industries had a good second quarter as the transport, storage, and communication industry stumbled by 1.9 percent.

"Transport support services were lackluster and there were declines in land freight and road passenger transport," it noted. "After holding its head above water for nine months, the construction industry lost steam in the second quarter."

The SA Stats continued, "A decline in economic activity related to non-residential and residential buildings pulled the industry lower. There was a small uptick in construction works, but this was not enough to lift the industry into positive territory."

Considering the investments in machinery and equipment related to renewable energy, South Africa asked China to send solar panels, battery storage, wind turbines, and renewables technology in June.

Furthermore, Electricity Minister Kgosientsho Ramokgopa shared last month that China and South Africa had signed energy agreements.