South Africa Dodges Recession but Agriculture Faces Headwinds: What It Means for Your Wallet

  • Economic Performance: South Africa's economy narrowly avoided a technical recession in the first quarter of 2023 with a slight GDP increase of 0.4%. However, the agriculture, forestry, and fisheries sector, a significant contributor to the nation's GDP, contracted by 12.3%.
  • Agriculture's Role and Challenges: The animal products sub-sector was the largest contributor to agricultural revenue, followed by the horticulture sub-sector and field crops. Despite these contributions, the sector faced significant challenges, with revenue gains insufficient to cover substantial input cost increases, leading to the contraction of the agricultural GDP.
  • Consumer Impact and Future Outlook: The contraction in the agricultural sector has implications for the retail sector and consumers, with rising input costs leading to higher prices for animal products. Despite the challenges, there are reasons for optimism, such as the early and increased export of avocados to Europe. The future of agriculture in South Africa will depend on managing these challenges and capitalizing on new opportunities.

South Africa’s economy narrowly avoided a technical recession in the first quarter of 2023, with a seasonally adjusted quarter-on-quarter real GDP increase of 0.4%. However, the agriculture, forestry, and fisheries sector, a significant contributor to the nation’s GDP, contracted by 12.3%, according to a recent press release.

The Role of Agriculture in South Africa’s Economy

The agricultural sector plays a crucial role in South Africa’s economy. In the first quarter of 2023, the animal products sub-sector provided the largest contribution to agricultural revenue, accounting for 56% of the total. The horticulture sub-sector followed, contributing 35%, while field crops made up the remaining 9%.

Despite these contributions, the sector faced significant challenges. Revenue gains in the animal products and horticulture sub-sectors were insufficient to cover substantial input cost increases, particularly for feed, fuel, electricity, packaging, and labor costs. This imbalance resulted in the contraction of the agricultural GDP.

The Impact on Consumers and the Retail Sector

The contraction in the agricultural sector has implications beyond the farm gate. It affects the retail sector, particularly grocery stores and supermarkets, which rely on a steady supply of agricultural products. The rise in input costs, particularly feed, has led to an increase in the prices of animal products, including pork, milk, and poultry.

For consumers, this means higher prices at the checkout. For those interested in personal finance and budgeting, it’s essential to be aware of these trends and plan accordingly. For instance, consumers might need to adjust their grocery budgets or consider alternative sources of protein if meat prices continue to rise.

Looking Ahead: The Future of Agriculture in South Africa

Despite the challenges, there are reasons for optimism. South Africa started exporting avocados to Europe two weeks earlier than in 2022, with three times the volume in Q1 2023 compared to Q1 2022. This development could open up new opportunities for growth in the horticulture sub-sector.

However, the agricultural sector’s future will depend on several factors, including global commodity prices, the impact of diseases like Avian Influenza, and the country’s ability to manage input costs. As South Africa navigates these challenges, the resilience and adaptability of its agricultural sector will be tested.

In conclusion, while South Africa’s economy managed to avoid a technical recession in Q1 2023, the contraction in the agricultural sector is a cause for concern. It underscores the need for strategies to manage input costs and mitigate the impact of global market trends on the country’s farmers and consumers.

Stay tuned to Rateweb for more updates on South Africa’s economy and the agricultural sector’s role in it. We provide the latest news and insights on financial services, credit, lending, personal finance, motor vehicles, insurances, and banking, helping you make informed decisions.

Table 1: Contributions of Different Sub-Sectors to Agricultural Revenue in Q1 2023

Sub-SectorContribution to Agricultural Revenue
Animal Products56%
Field Crops9%

Table 2: GVP Growth in Animal Products Industries in Q1 2023

IndustryGVP Growth in Q1 2023
Visited 1 times, 1 visit(s) today

Stay ahead in the financial world – Sign Up to Rateweb’s essential newsletter for free. Get the latest insights on business trends, tech innovations, and market movements, directly to your inbox. Join our community of savvy readers and never miss an update that could impact your financial decisions.

Do you have a news tip for Rateweb reporters? Please email us at


Start trading with a free $30 bonus

Trade stocks, forex, commodities, metals and CFDs on stock indices with an internationally licensed and regulated broker. For all clients who open their first real account, XM offers a $30 trading bonus without any initial deposit needed. Learn more about how you can trade over 1000 instruments on the XM MT4 and MT5 platforms from your PC and Mac, or from a variety of mobile devices.


Personal Financial Tools

Below is a list of tools built to assist South Africans to make the best financial decisions:



South Africa’s primary source of financial tools and information

Contact Us


Rateweb strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions.

Rateweb is not a financial service provider and should in no way be seen as one. In compiling the articles for our website due caution was exercised in an attempt to gather information from reliable and accurate sources. The articles are of a general nature and do not purport to offer specialised and or personalised financial or investment advice. Neither the author, nor the publisher, will accept any responsibility for losses, omissions, errors, fortunes or misfortunes that may be suffered by any person that acts or refrains from acting as a result of these articles.