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South Africa’s economy shrank by 1.3% in the fourth quarter of 2022 after rallying in the third quarter.
This means that GDP for Q4:2022 fell below pre-pandemic levels, according to the latest figures from Statistics South Africa.
The decline is worse than economists had predicted.
Stats SA attributed this to a drop in economic activity in key industries like finance, trade, mining, agriculture and manufacturing.
Growth for 2022 was 2%.
Bruce Whitfield gets comment from Annabel Bishop, chief economist at Investec.
Bishop notes that South Africa’s exports also contracted by 4.8% in the fourth quarter of 2022, due to a slowdown caused by both global and domestic factors.
That’s a massive figure… and of course loadshedding did affect exporters as well…
Annabel Bishop, Chief Economist – Investec
Does the 1.3% contraction mean we’re heading for a technical recession, taking into account the tough environment experienced also in the first quarter of 2023?
That is the risk South Africa faces she says, particularly in the face of the warning that power cuts could get worse.
Severe loadshedding drops you down into the risk of recessionary conditions. We already calculated that, if you’re going to get an average of Stage 4-5 loadshedding this year, we could see economic growth drop down to 0.4%
Annabel Bishop, Chief Economist – Investec
I think there’s been a lack of urgency in general from government over the loadshedding crisis… I think there is downside risk and risk of an actual recession.
Annabel Bishop, Chief Economist – Investec
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