SA narrowly escapes recession

Henry

South Africa narrowly escaped a technical recession in the fourth quarter.

Statistics South Africa (StatsSA) announced on Tuesday that the South African economy only grew by a marginal 0.1% in the fourth quarter after it shrank by 0.2% in the third quarter.

Dr. Dion George, DA MP and the party’s spokesperson on finances, says that the economy has practically come to a standstill with this meager growth.

“And South Africans are getting poorer,” warns George. “The status quo will apply as long as the ANC remains in power.”

The meager economic growth between October and December brought the annual growth rate for 2023 to 0.6% – lower than the Treasury’s estimate of 0.8% in the national budget.

George says that this projection, although low and uninspiring, was apparently too optimistic.

“This means that expected income, which has already been revised downwards, remains overestimated and that there will be even less money available for crucial expenditure on service delivery and social support.”

George therefore does not expect the economy to grow at the projected 1.4% in the medium term.

StatsSA announced today that real gross domestic product (GDP) in the fourth quarter amounted to R1 158 billion. This is more than the pre-Covid-19 reading of R1 150 billion, but still less than the peak of R1 161 billion recorded in the third quarter of 2022.

However, StatsSA didn’t just have bad news.

Six of the country’s ten industries kept the economy in the green during the fourth quarter. The transport, storage and communication industry had the biggest positive effect. This industry expanded by 2.9% and contributed 0.2 of a percentage point to GDP growth.

All transportation services across the industry also reported increased economic activity.

StatsSA also points out that the country experienced fewer days of load shedding in the fourth quarter (63 days) compared to the third quarter (91 days), which resulted in electricity production and consumption reflecting positively in the GDP numbers .

Electricity, gas and water also achieved a second consecutive quarter of positive growth and expanded by 2.3%.

However, trade, agriculture, construction and government performed worse in the fourth quarter. Agriculture, forestry and fishing had a particularly difficult quarter and shrank by 9.7%.