South Africa’s Economy Shows Minimal Growth in Final Quarter of 2023, Amid Concerns for Upcoming Elections

South African economy at a standstill months before election

South Africa’s economy showed a marginal increase of 0.1% in the final quarter of 2023, according to data released by Statistics South Africa on Tuesday. This was the last GDP release before the country’s elections in May. While this growth rate is not significant, it represents a sideways movement for the country’s struggling economy.

The data revealed that South Africa narrowly avoided a technical recession, defined as two consecutive quarters of falling economic output, after a 0.2% contraction in the third quarter. Despite this, the economy grew by 0.6% for the full year of 2023, in line with National Treasury forecasts.

Joe de Beer, head of economic statistics at Statistics South Africa, commented on the growth rate: “A growth rate of 0.1% is not significant and is more of a sideways movement.” The stagnant economic growth and high levels of unemployment are key concerns for voters as they approach national and provincial elections. Analysts predict that the ruling African National Congress (ANC) may lose its parliamentary majority for the first time since the end of apartheid.

According to Statistics South Africa’s data, six industries made a positive contribution to growth in the fourth quarter, with sectors such as transport, mining, and finance driving expansion. However, four industries made a negative contribution to growth. Despite economists predicting a 0.3% growth rate, actual growth was slightly lower than expected due to challenges presented by inefficiencies at state-owned entities like Eskom and Transnet, along with a cost-of-living crisis affecting consumer spending.

Despite these challenges, Maluleke noted that since 1994 there has been a shift in the composition of South Africa’s economy from manufacturing to finance and government services as key drivers of growth in the democratic era.

Overall while this marginal growth is welcome news for some it does little to address ongoing issues facing South African citizens such as high unemployment rates and rising living costs

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