GPD slowdown 'unexpected, disappointing’
North-West University Business School’s Professor Raymond Parsons has described the third quarter GPD stats as unexpected and disappointing.
Stats SA released the Gross Domestic Product stats on Tuesday morning.
The country's economy contracted to 0.3% between July and September, compared to the 0.4% increase between April and June.
The agricultural sector was the most significant contributor to the drop in the GDP during the third quarter.
Parsons says the GDP stats confirm that the country's growth remains vulnerable to adverse weather conditions.
"The unexpected and disappointing GDP growth figures for the third quarter of 2024 confirm the extent to which South Africa’s growth prospects remain vulnerable to negative factors such as adverse weather conditions, weakened exports, and other lagging sectors.
"The negative economic and other factors in the third quarter have clearly outweighed the positive ones. To the extent that tough climatic circumstances have made agriculture the largest negative contributor to lower growth, there is potential for a future turnaround if weather conditions improve sooner rather than later."
Meanwhile, the Deputy Director General responsible for economic statistics at National Treasury, Joe de Beer, said although the agricultural industry was the biggest contributor to the decline, a decent performance was seen from the livestock sector.
"Within the agriculture sector, we saw decent performances from livestock, but it was the field crops that came in with a huge negative, and here we can think about the summer drought conditions that we had that impacted negatively on the maize harvest as well as soya in quarter two and quarter three."
Parsons added that the country's economic recovery is clearly slow and uneven.
"These negative growth trends, therefore, confirm why the GNU policy of seeking higher, inclusive, job-rich growth must remain the overriding priority. In particular, much higher levels of total fixed investment are needed. High-frequency economic data remain mixed.
"The latest growth data suggests that the forecasts of already modest GDP growth in 2025 and beyond may have to be revised. The clear message of the third quarter GDP figures is, nonetheless, to reinforce the need for both the public and private sectors to urgently expedite the implementation of growth-friendly economic reforms."
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