By Lehlohonolo Lehana.
South Africa’s economy grew 0.1% in the fourth quarter of 2023 (October–December), in quarter-on-quarter seasonally adjusted terms, narrowly avoiding a technical recession, statistics agency data showed on Tuesday.
According to the most recent preliminary indicators, real gross domestic product (GDP) growth rose 0.6% in 2023, compared with an increase of 1.9% in 2022.
This is largely a reflection of the failure to address the crippling power shortages, the unfolding logistics crisis, the meltdown of local government services, and rampant crime.
Tuesday’s data is the last gross domestic product (GDP) release before national and provincial elections in May.
Africa’s most industrialised economy has stagnated over the last decade, with GDP averaging 0.8% since 2012.
For the fourth quarter, the transport, storage and communication industry increased by 2.9%, contributing 0.2 of a percentage point to GDP growth, according to Statistics SA. Increased economic activities were reported for land transport, air transport, transport support services and communications.
The mining and quarrying industry grew 2.4% in the fourth quarter, the personal services industry increased 0.9%, while the finance, real estate and business services industry expanded by 0.6%. Expenditure on real GDP rose 0.1% in the fourth quarter of 2023.
Analysts polled by Reuters also expected the economy to show growth in the fourth quarter.
The annual increase in real GDP of 0.6% in 2023 was primarily led by higher economic activities in finance, real estate and business services; transport, storage and communication; personal services; and manufacturing, Statistics SA said.
In January, the central bank’s Monetary Policy Committee revised 2023 GDP down to 0.6% from 0.8% in November. It also said that while the domestic GDP outcome for the third quarter of 2023 was weaker than the SA Reserve Bank had forecast, at a negative 0.2%, it expected the fourth quarter to show some improvement, with output expanding by 0.4%Last month National Treasury also forecast 2023’s GDP at 0.6%.
A technical recession is defined as two consecutive quarters of contracting economic output. The economy shrunk 0.2% in the third quarter of 2023.