PRETORIA, – South Africa’s economy eked out marginal growth of 0.1% in the final quarter of 2023, statistics agency data showed on Tuesday, in the last gross domestic product release before elections in May.
The data meant Africa’s most industrialised economy narrowly avoided a technical recession — defined as two consecutive quarters of falling economic output — after a contraction of 0.2% in the third quarter.
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For 2023 as a whole, growth came in at 0.6%, in line with a National Treasury forecast.
“I don’t think growth of 0.1% is really positive growth, it’s more of a sideways movement,” said Joe de Beer, head of economic statistics at Statistics South Africa.
Stagnant economic growth and high levels of unemployment are high on the list of voter concerns as the country heads to national and provincial elections.
Analysts widely predict the governing African National Congress (ANC) will lose its parliamentary majority for the first time since apartheid ended three decades ago.
A Statistics South Africa presentation showed six industries made a positive contribution in the fourth quarter, with transport, mining and finance propelling growth. Four made a negative contribution.
In the final three months of last year, the economy was around the same size as in the first quarter of 2020, before a steep contraction related to the COVID pandemic.
Statistician-General Risenga Maluleke said the composition of the economy had changed since 1994, with finance and government services overtaking manufacturing as growth drivers in the democratic era.
The fourth-quarter growth rate was slightly lower than the 0.3% growth economists polled by Reuters had predicted (ZAGDPN=ECI), opens new tab.
Inefficiencies at state power utility Eskom and port and freight rail operator Transnet continue to stifle growth, while a cost-of-living crisis has squeezed consumer spending.
Source: Reuters
