Economic activity in South Africa recovered in the fourth quarter of 2024 as real gross domestic product (GDP) increased by 0.6% following a revised contraction of 0.1% in the third quarter. The real gross value added (GVA) by the primary and tertiary sectors expanded in the fourth quarter, while the real output of the secondary sector contracted. Growth in annual output moderated from 0.7% in 2023 to 0.6% in 2024, with annual real GDP 1.6% higher in 2024 than the pre-pandemic level recorded in 2019. This was due to the higher output of the tertiary sector, while the output of the primary and secondary sectors remained below their respective pre-pandemic levels.

The real GVA by the primary sector reverted to an increase in the fourth quarter of 2024 as agricultural output rebounded by 17.2% following a revised contraction of 19.7% in the third quarter. The turnaround emanated from the higher production of field crops and animal products. On an annual basis, agricultural output contracted by 8.0% in 2024 as adverse weather conditions attributed to the El Niño weather phenomenon affected the production of field crops. Mining output decreased marginally in the fourth quarter of 2024 as production decreased in 7 of the 12 mining subsectors, with manganese ore, iron ore, gold and chromium ore contributing the most to the decline. Mining output was hampered by lower international commodity prices as well as persistent rail and port inefficiencies.

The real output of the secondary sector contracted in the fourth quarter of 2024 as output decreased in the manufacturing, construction as well as the electricity, gas and water sectors. The production of both durable and non-durable manufactured goods decreased in the fourth quarter, with 6 of the 10 manufacturing subsectors reporting low production volumes, which can be attributed to subdued domestic and global demand, rising input costs and logistical constraints. The volume of both electricity produced and consumed decreased over this period, reflecting the decline in Eskom’s electricity generation capacity due to planned and unplanned outages. The contraction in the real GVA by the construction sector in the fourth quarter of 2024 reflected lower residential and non-residential building activity, with annual output contracting for an eighth successive year.

Real economic activity in the tertiary sector increased further in the fourth quarter of 2024, driven by an increase in the real output of the commerce as well as finance, insurance, real estate and business services sectors, while the real output of the general government, personal services as well as transport, storage and communication services sectors decreased. The higher output of the commerce sector resulted from increased real retail, wholesale and motor trade activity, likely supported by lower interest rates and inflation as well as a boost to disposable income related to two-pot retirement fund withdrawals and relatively higher real wages. The output of the finance, insurance, real estate and business services sector expanded further in the fourth quarter of 2024 as activity increased in the real estate and other business services as well as monetary intermediation subsectors. By contrast, the real GVA by the transport, storage and communication services sector contracted further, reflecting reduced activity in land freight transportation and transport support services.

Real gross domestic expenditure (GDE) expanded by 0.6% in the fourth quarter of 2024 following a contraction of 0.2% in the third quarter. Real final consumption expenditure by households increased further in the fourth quarter and contributed the most to growth in real GDP. By contrast, real final consumption expenditure by general government and gross fixed capital formation decreased, alongside a notable deaccumulation of real inventory holdings over this period. On an annual basis, real GDE decreased by 0.7% in 2024 following an increase of 0.8% in 2023.

Growth in real final consumption expenditure by households accelerated to 1.0% in the fourth quarter of 2024 from 0.4% in the third quarter, in line with the further increase in households’ real disposable income. Real outlays on durable, semi-durable and non-durable goods increased in the fourth quarter, while consumer spending on services decreased. Year-on-year growth in real spending by households accelerated to 2.3% in the fourth quarter of 2024 from 1.3% in the previous quarter, likely supported by retirement fund withdrawals.

Household debt as a percentage of nominal disposable income declined from 62.4% in the third quarter of 2024 to 62.0% in the fourth quarter as the increase in household disposable income exceeded that in household debt. Households’ cost of servicing debt relative to disposable income decreased marginally from 9.1% to 8.9% over the same period, reflecting the slower pace of increase in the stock of debt as well as lower interest payments following the further 25 basis point reduction in the prime lending rate in November 2024.

Households’ net wealth increased further in the fourth quarter of 2024, albeit at a slower pace, as the market value of total assets increased slightly more than that of total liabilities. The value of assets increased despite the 2.8% decrease in the FTSE/JSE All-Share Index, on balance, in the fourth quarter. By contrast, the value of housing stock increased as growth in most of the available house price indices accelerated somewhat, despite remaining fairly subdued.

Real gross fixed capital formation decreased by 0.7% in the fourth quarter of 2024 following a moderate increase in the third quarter as capital spending by general government and public corporations decreased. By contrast, fixed investment by private business enterprises increased in the fourth quarter, along with improved business confidence. Real capital outlays decreased by 3.7% on an annual basis in 2024 following an increase in 2023, resulting in the ratio of nominal gross fixed capital formation to nominal GDP decreasing from 14.9% in 2023 to 14.5% in 2024.

Total household-surveyed employment increased by a further 132 000 persons in the fourth quarter of 2024 as the formal, informal and private household sectors recorded job gains, while employment decreased in the agricultural sector. The year-on-year pace of increase in total household-surveyed employment accelerated to 2.1% in the fourth quarter of 2024.

South Africa’s total labour force increased slightly to 25.0 million in the fourth quarter of 2024 as the number of employed persons increased, while the number of officially unemployed persons decreased marginally. As a result, the official unemployment rate decreased slightly from 32.1% in the third quarter of 2024 to 31.9% in the fourth quarter. The proportion of long-term unemployment (being unemployed for one year or longer) to total unemployment remained elevated and increased to 77.7% in the fourth quarter of 2024 but was still below the most recent peak of 80.0% recorded in the fourth quarter of 2021.

The year-on-year pace of increase in formal non-agricultural nominal remuneration per worker decelerated from 5.5% in the second quarter of 2024 to 5.1% in the third quarter as the moderation in private sector remuneration per worker outweighed the notable acceleration in public sector remuneration per worker. Growth in private sector remuneration per worker slowed to 2.9% in the fourth quarter of 2024 – the slowest pace of increase since the third quarter of 2020 – partly due to lower bonus and overtime payments in the finance, insurance, real estate and business services sector in particular. The acceleration in public sector nominal remuneration growth largely reflected base effects related to the large number of low-earning youth employed under the Presidential Youth Employment Initiative a year earlier.

Growth in labour productivity in the formal non-agricultural sector accelerated for a third consecutive quarter to 3.8% in the third quarter of 2024 as year-on-year growth in employment moderated over this period, while that in output accelerated marginally. Conversely, growth in nominal unit labour cost in the formal non-agricultural sector slowed to 1.3% in the third quarter of 2024 as year-on-year growth in total remuneration moderated, while that in output accelerated slightly. Growth in economy-wide nominal unit labour cost accelerated marginally to 3.7% in the fourth quarter of 2024 as year-on-year growth in the compensation of employees accelerated at a faster pace than that in total output.

Global inflationary pressures eased during most of 2024, largely due to lower international fuel prices. In South Africa, producer and consumer price inflation receded to multi-year lows in October 2024 before accelerating somewhat thereafter. Headline consumer price inflation accelerated from a low of 2.8% in October 2024 to 3.2% in February 2025 amid an acceleration in non-durable goods price inflation due to the much lower rate of deflation in fuel prices. The spot price of Brent crude oil fluctuated within a fairly narrow range of US$70 to US$80 per barrel from September 2024, reflecting the offsetting effects of ongoing geopolitical tensions, sporadic extreme cold weather in the northern hemisphere and concerns over the outlook for global economic growth amid escalating global trade tensions. Domestic underlying inflationary pressures eased throughout 2024 and into the early months of 2025, with core inflation slowing to 3.4% in February 2025, primarily due to the moderation in services and durable goods price inflation.

South Africa’s trade surplus widened to R233 billion in the fourth quarter of 2024 from R200 billion in the third quarter as the value of merchandise and net gold exports increased more than the value of merchandise imports. South Africa’s terms of trade improved further in the fourth quarter of 2024 as the rand price of exported goods and services increased, while that of imports decreased.

The value of net gold exports increased significantly by 41.2% in the fourth quarter of 2024 due to the combination of the higher physical quantity of gold exported and the average realised gold price, which increased alongside the further increase in the United States (US) dollar price of gold. By contrast, the value of merchandise exports decreased slightly further in the fourth quarter of 2024 as the decrease in the export value of mining products outweighed the increases in the value of manufacturing and agricultural exports. The value of mining exports decreased for a second consecutive quarter, with the lower export value of mineral products as well as base metals and articles thereof outweighing the higher export value of pearls, precious and semi-precious stones as well as platinum group metals (PGMs). The higher value of manufacturing exports in the fourth quarter of 2024 mainly reflected increased exports of chemical products, vehicles and transport equipment, artificial resins and plastics as well as textiles and articles thereof. The value of agricultural exports was boosted by the increased exports of meat and fish.

The higher value of merchandise imports in the fourth quarter of 2024 was largely boosted by increased agricultural imports and, to a lesser extent, mining and manufacturing imports. The increased value of agricultural imports reflected a recovery in the imports of vegetable products as well as animal and vegetable fats and oils. The slight increase in the import value of manufactured products resulted mainly from the higher imports of vehicles and transport equipment, which included several aircraft, as well as textiles and articles thereof. The value of mining imports increased slightly in the fourth quarter of 2024 as the higher import value of pearls, precious and semi-precious stones as well as base metals and articles thereof outweighed the lower import value of mineral products.

The shortfall on the services, income and current transfer account widened from R256 billion in the third quarter of 2024 to R265 billion in the fourth quarter. This emanated from a wider deficit on the income account, which largely reflected a notable increase in gross dividend payments, while the services and current transfer accounts recorded smaller deficits. The wider trade surplus outweighed the larger deficit on the services, income and current transfer account, resulting in a narrowing of the deficit on the current account of the balance of payments from 0.8% of GDP in the third quarter of 2024 to 0.4% of GDP in the fourth quarter.

The net flow of capital on South Africa’s financial account of the balance of payments (excluding unrecorded transactions) switched from an inflow of R39.1 billion in the third quarter of 2024 to an outflow of R9.5 billion in the fourth quarter. On a net basis, portfolio investment, financial derivatives and reserve assets recorded outflows, while direct investment and other investment recorded inflows.

South Africa’s total external debt increased significantly from US$163.8 billion at the end of June 2024 to US$176.3 billion at the end of September. However, expressed in rand terms, South Africa’s total external debt increased only marginally as the exchange value of the rand appreciated by 6.4% against the US dollar over this period.

South Africa’s positive net international investment position decreased from R2 050 billion at the end of June 2024 to R1 924 billion at the end of September as foreign liabilities increased more than foreign assets. The appreciation in the exchange value of the rand had a larger impact on foreign assets than on foreign liabilities as the nominal effective exchange rate (NEER) of the rand increased, on balance, by 2.3% in the third quarter of 2024.

Subsequently, the NEER decreased by 3.5% in the fourth quarter of 2024, largely due to the impact of global factors during most of the quarter. The US dollar appreciated against several emerging market currencies, including the rand, as risk aversion increased following uncertainty around US foreign trade and immigration policies leading up to and after the US general election. This was exacerbated by rising geopolitical tensions in several regions, including the Middle East, South Korea, Russia and Ukraine. The NEER then increased somewhat in the opening months of 2025, along with changing inflation expectations in the US and growing concerns about the strength of the US economy amid uncertainty around US foreign trade policies.

Growth in the broadly defined money supply (M3) was fairly sluggish during the first half of 2024 but picked up pace in the second half of the year, amounting to 7.1% in January 2025. The acceleration reflected faster growth in the deposit balances of companies, while growth in those of households remained steady.

Year-on-year growth in total loans and advances extended by monetary institutions to the domestic private sector accelerated slightly from April 2024 to August before slowing again to 4.1% in January 2025. Growth in most categories of credit extension to companies moderated throughout 2024, except for mortgage advances. Similarly, growth in credit extension to households recorded a broad-based slowdown during 2024 against the backdrop of constrained household finances.

Domestic bond yields increased alongside international bond yields in recent months, with the yield on 10-year South African rand-denominated government bonds increasing from a recent low of 9.91% on 27 September 2024 to 10.52% on 14 March 2025. Over this period, concerns about the magnitude and timing of the implementation of the proposed new US foreign trade policies and the depreciation in the exchange value of the rand, among other factors, weighed on domestic bond yields.

The total nominal value of outstanding listed and unlisted rand-denominated debt securities issued by residents and non-residents in the domestic primary debt market increased by 7.9% year on year to R6.8 trillion at the end of 2024. Net issuance by the general government increased notably over this period and included the issuance of two new international bonds in November. By contrast, corporations significantly reduced their net issuance of rand-denominated debt securities in the domestic primary corporate debt market in 2024, mainly reflecting a switch from net issuance of unlisted debt securities by banks in 2023 to net redemptions in 2024, along with banks’ reduced funding needs.

The preliminary non-financial public sector borrowing requirement decreased significantly by R51.0 billion year on year to R197.1 billion in the first nine months (April–December 2024) of fiscal 2024/25. The decline resulted largely from the smaller deficit of national government due to higher revenue collections in most tax categories, while extra-budgetary institutions recorded a significantly larger cash surplus. In addition, the non-financial public enterprises and corporations, or state-owned enterprises, also recorded a smaller deficit over this period.

National government’s cash book deficit increased slightly by R1.5 billion in the first nine months of fiscal 2024/25 compared with the corresponding period of the previous fiscal year as total revenue and expenditure increased by similar amounts.  However, national government’s net borrowing requirement decreased significantly by R77.9 billion year on year to R160.6 billion in the first nine months of fiscal 2024/25 after accounting for accrual adjustments, Eskom’s debt restructuring programme and, in particular, the net Gold and Foreign Exchange Contingency Reserve Account settlement of R100 billion. The net borrowing requirement was financed in the domestic financial markets through the net issuance of domestic and foreign government bonds as well as Treasury bills and short-term loans from the Corporation for Public Deposits, with national government’s available cash balances also increasing significantly. Despite the smaller net borrowing requirement, national government’s gross loan debt increased by 10.0% year on year to R5 668 billion (77.3% of GDP) as at 31 December 2024.