Johannesburg, Sep 3 (IANS): South Africa recorded a slight growth of 0.4 per cent in gross domestic product (GDP) in the second quarter, according to data released by Statistics South Africa (Stats SA) Tuesday.

The growth is welcome, considering the country's GDP contracted 0.1 per cent in the first quarter of 2024. South Africa's growth was projected to pick up to 1 percent this year after 0.6 per cent growth in 2023 mainly due to the energy crisis and extensive port issues.

According to Statistician-General Risenga Maluleke, the biggest drivers of growth were finance, manufacturing, trade, as well as electricity, gas and water supply. "On the expenditure (demand) side, household consumption, government consumption, and a build-up in inventories contributed favorably to growth," said Maluleke.

Maluleke also said manufacturing and trade notably contributed to the growth, especially since manufacturing turned positive after declining in the first quarter, with a 1.1 per cent rise in the second quarter. "Production was mainly driven by motor vehicles and transport equipment and food and beverages."

According to Stats SA, robust economic activity in wholesale, retail, and tourist accommodation drove the trade, catering, and accommodation industry up by 1.2 per cent, Xinhua news agency reported.

Efforts to address and alleviate the energy crisis were positively impacting the economy. "The country experienced no load shedding in the second quarter, which helped the electricity, gas and water supply industry. It grew by 3.1 per cent, driven by increased electricity generation and water distribution," Maluleke noted. "If we ignore the topsy-turvy economic environment caused by the pandemic in 2020, the 3.1 percent growth rate represents the sharpest increase since the third quarter of 2008."

Jannie Rossouw, an economics professor at Wits University, said while South Africa avoided a technical recession, the growth was welcome but still too low. "It's very positive news that the technical recession was avoided, but economic growth needs to be better than population growth."

He expected a better performance with the government of national unity in place, citing factors like dropping fuel prices, which should lead to lower prices, and the new pension law that took effect on Sept. 1, allowing workers to withdraw some funds, which will boost spending.