South Africa narrowly avoids technical recession in Q4

AFRICAN BUSINESS AND ECONOMYMarch 9, 2024 at 8:12 PM UTC

TLDR

South Africa's economy grew by 0.1% in Q4 2023, narrowly avoiding a technical recession.
The economy fell short of the 0.3% growth forecasted by economists.
This GDP update precedes the upcoming national and provincial elections in May.

South Africa's economy expanded by 0.1% in the fourth quarter of 2023 in quarter-on-quarter seasonally adjusted terms, narrowly averting a technical recession, according to data from the statistics agency released on Tuesday.

A technical recession is defined as two consecutive quarters of contracting economic output. The economy shrunk 0.2% in the third quarter of 2023. Statistics South Africa reported that the economy grew by 0.6% throughout 2023.

However, the fourth-quarter growth rate fell slightly short of the 0.3% growth forecasted by economists polled by Reuters. This data release on Tuesday marks the final gross domestic product (GDP) update before the national and provincial elections scheduled for May.

Key Takeaways

Over the past decade, Africa's most industrialized economy has experienced stagnation, with GDP averaging 0.8% since 2012. This sluggish growth can be attributed to various factors, including inefficiencies at state-owned entities such as the power utility Eskom and the port and freight rail company Transnet. These inefficiencies have hindered economic progress and contributed to weak growth. In addition, a cost-of-living crisis has exacerbated the situation by squeezing consumer spending, further dampening economic growth. This combination of factors has led to a challenging economic environment in South Africa, impacting its overall economic performance over the past decade.

South Africa

Economy

GDP

Inflation