By Lehlohonolo Lehana.
Minister in the Presidency Khumbudzo Ntshavheni says South Africans should draw inspiration from the 0.4 per cent increase in gross domestic product (GDP) in the first quarter of 2023.
According to Tuesday’s Quarterly Labour Force Survey released by Statistics South Africa (Stats SA), in the first three months of 2023 there was an increase of 258,000 – to 16.2 million – in the number of employed people.
Welcoming the growth, the minister said the positive GDP indicators and the recently published Quarterly Labour Force Survey results for the same quarter serve as encouragement that the country is making progress in line with the Economic Reconstruction and Recovery Plan.
Stats SA figures show that eight industries recorded growth from January to March 2023, with strong contributions from manufacturing, finance, personal services, transport and trade.
Within the manufacturing sector, food and beverages accounted for the single largest contribution to the growth in economic output in the quarter under review. Increased economic activities were reported for wholesale trade, retail trade and catering and accommodation.
“Today’s growth indicators and the recent Quarterly Labour Force Survey show that while the challenges we face in our economy are serious, we have been able to avoid a downturn in our economic output.”
“The gains we have seen across a number of sectors tell us that we are rebuilding our economy and that we must keep working together as a nation to build on the growth we are experiencing. As we do so, we cannot rest on our laurels, but neither can we let hopelessness and pessimism overwhelm our ability to turn things around, “Ntshavheni said.
Econometrix chief economist Azar Jammine has described the first-quarter GDP numbers released by Stats SA as encouraging.
Agriculture, forestry and fishing were the biggest drag on first-quarter growth.
Jammine says the lack of electricity had a negative impact on the irrigation and harvesting of field crops.
“There was a very big disappointment which was the falloff in the agricultural output. This is largely attributable to load shedding and the disruption that the lack of electricity has had on irrigation and in harvesting.”
The manufacturing and finance industries were the largest positive contributors to growth in the first quarter.
“Eight of the ten industries recorded growth in the first three months of the year with manufacturing and finance, real estate and business services the largest positive contributors. Manufacturing output increased by 1,5%, adding 0,2 of a percentage point to GDP growth, “said Chief Director for National Accounts Bokang Vumbukani Lepolesa.
The South African Federation of Trade Unions (Saftu) said it didn’t believe it was worth celebrating the country’s new gross domestic product (GDP) figure.
While the economy rebounded to pre-COVID-19 levels in the first three months of 2023, Saftu spokesperson Trevor Shaku said the latest improvement was not enough.
“The economy grew by 0.4% in the first quarter of 2023, compared to a 1.1% decline in the fourth quarter of 2022. Like we said before, the South African economy has established a trend of a zig-zag growth path from one quarter to another, which on average, annually, amounts to negligible growth.”
Shaku also tore into the central bank, saying that rising interest rates were sabotaging the economy.
“The governor of the Reserve Bank of New Zealand, [Adrian Orr], was honest enough to admit this sinister strategy to fix the economy by stabbing the people. In November 2022, Governor Orr admitted that they were engineering a recession to get inflation down.