Agriculture makes a comeback, helps lift GDP | Fin24
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Agriculture makes a comeback, helps lift GDP

Sep 05 2017 20:13
Lameez Omarjee

Johannesburg – The South African agriculture sector was the single largest contributor to GDP growth in the second quarter of 2017, data from Statitstics South Africa (StatsSA) has revealed.

The sector reported production growth of 33.6% and contributed 0.7 of a percentage point to the 2.5% growth in GDP for the quarter.

In nominal terms agriculture was up R15bn to R40bn.

The growth in the agriculture sector came off a low base, deputy director general of economic statistics Joe de Beer said, adding that much of the growth was driven by the record maize crop expected for the second and third quarters.

Paul Makube, a senior agricultural economist at FNB, said the agriculture sector has been making a slow recovery following a severe drought.

“Recent forecasts showed that normal rainfall is expected for the 2017/18 crop season as the El Niño weather pattern has dissipated,” said Makube. “The strength or weakness of the rand will influence agriculture’s contribution to the economy in terms of import parity prices and export revenues.”

The grain harvest is expected to be 18.91m tonnes, 101% higher than last year. The maize harvest is estimated at 16.41m tonnes, up 111% from last year, he said.

Over the past few years the agriculture industry has contributed less than 2.5% to GDP per year.

This could be higher given its links to other sectors, say analysts. In the manufacturing sector, for example, some 70% of agricultural output is used as raw material. 

Stanlib chief economist Kevin Lings noted that the growth in agriculture was due to the massive turnaround in the summer agricultural season in 2017.

He added that without the contribution of the primary sector, which includes agriculture, South Africa’s second quarter GDP would have only grown by 1.5%, instead of 2.5%.

This suggested that the larger economy was still weak. 

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stats sa  |  pali lehohla  |  sa economy  |  gdp


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