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Growth in the SA economy increased 0.1% from the third to the fourth quarter of 2023, in line with expectations, with the country having avoided a technical recession after Eskom’s power generation improved in the final quarter of last year.
According to the most recent preliminary indicators, real gross domestic product (GDP) growth rose 0.6% in 2023, compared to an increase of 1.9% in 2022.
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.
"Power shortages were 45% lower over the fourth quarter compared to the third quarter, made possible by the return of lost capacity at the dawn of the quarter and a sharper-than-usual decline in the demand for energy over December," Nedbank said in a note. It estimated real GDP growth of around 0.3% quarter-on-quarter. Analysts polled by Reuters also expected the economy to show growth in the fourth quarter.
Annual increase the lowest since 2009
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%.
GDP in 2023 was higher than that of the pre-pandemic growth of 0.3% in 2019, but excluding the pandemic years, it was the worst growth number since 2009.
The SA Reserve Bank’s GDP growth forecast for 2024 and 2025 was unchanged in January at 1.2% and 1.3%, respectively. Treasury was more optimistic in February and expected 1.3% in 2024 and 1.6% in 2025.
