South Africa’s communications sector is among those that helped the economy rebound, avoiding a technical recession in the fourth (Q4) of 2023.
Yesterday, Statistics South Africa (Stats SA) announced the country’s economy grew by a marginal 0.1% in Q4 (October-December), taking the annual growth rate for 2023 to 0.6%.
Real gross domestic product (GDP) for the period under review was R1.158 trillion, which is above the pre-COVID-19 reading of R1.150 trillion, but still below the peak of R1.161 trillion recorded in the third quarter of 2022, according to Stats SA.
“Increased economic activities were reported for land transport, air transport, transport support services and communications,” says Stats SA.
“In the fourth quarter, six of the 10 industries kept the economy in the green. The transport, storage and communications industries made the biggest positive impact, expanding by 2.9% and contributing 0.2 of a percentage point to GDP growth. Increased economic activity was reported for all transport services across the industry.”
South Africa’s economy has been in the doldrums for some time, compounded by the COVID-19 pandemic. Additionally, unemployment has continued to rise, with the official unemployment rate at 31.9% in the third quarter of 2023.
According to the national statistical service, the latest preliminary indicators show real GDP increased by 0.6% in 2023, following an increase of 1.9% in 2022.
It was primarily led by higher economic activities in finance, real estate and business services, which contributed 0.4 of a percentage point based on growth of 1.8%. Transport, storage and communications contributed 0.3 of a percentage point based on growth of 4.3%.
Stats SA further announced the personal services industry increased by 0.9% in the fourth quarter, contributing 0.1 of a percentage point, with increased economic activities reported for health and education.
The finance, real estate and business services industry increased by 0.6%, pushed higher by financial intermediation, auxiliary activities, real estate and business services, contributing 0.1 of a percentage point.
Meanwhile, the trade, catering and accommodation industry decreased by 2.9% in the quarter, contributing -0.3 of a percentage point. Decreased economic activities were reported for wholesale trade, retail trade, motor trade, accommodation, and food and beverages.
Trade, agriculture, construction and government were weaker.
“The agriculture, forestry and fishing industry decreased by 9.7% in the fourth quarter of 2023, contributing -0.2 of a percentage point to GDP growth. This was primarily due to decreased economic activities reported for field crops, animal products and horticulture products,” notes Stats SA.
In the economic outlook of government’s 2024 Budget Review, released with the National Budget Statement, it was noted the transport, storage and communications sectors grew by 4% in the first nine months of 2023, compared with the same period in 2022.
“In telecommunications, the rollout of digital infrastructure has enabled new investment in the sector and an improvement in the quality of broadband internet,” it said.
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