By Kopano Gumbi and Sfundo Parakozov
PRETORIA (Reuters) – South Africa's economy posted marginal growth of 0.1% in the final quarter of 2023, statistics agency data showed on Tuesday in the final gross domestic product release before May elections.
The data showed Africa's most industrialized economy narrowly avoided a technical recession – defined as two consecutive quarters of falling economic output – after a 0.2% contraction in the third quarter.
For the full year 2023, growth was 0.6%, in line with a Treasury forecast.
“I don’t think 0.1% growth 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 unemployment are high on voters' list of concerns as the country approaches national and regional elections.
Analysts widely expect the ruling African National Congress (ANC) to lose its parliamentary majority for the first time since the end of apartheid three decades ago.
A presentation from Statistics South Africa showed six sectors contributed positively in the fourth quarter, with transport, mining and finance driving growth. Four made a negative contribution.
In the final three months of last year, the economy was about the same size as it was in the first quarter of 2020, before a sharp contraction due to the COVID pandemic.
Statistician-General Risenga Maluleke said the composition of the economy had changed since 1994, with financial and government services overtaking manufacturing as drivers of growth in the democratic era.
The fourth-quarter growth rate was slightly lower than 0.3% forecast by growth economists polled by Reuters.
Inefficiencies at state power utility Eskom and port and rail freight operator Transnet continue to slow growth, while a cost-of-living crisis is depressing consumer spending.
(Reporting by Kopano Gumbi and Sfundo Parakozov; Additional reporting by Nellie Peyton; Editing by Alexander Winning and Christina Fincher)
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