As a result of a decrease in output in the building, mining, and agricultural industries, the South African economy saw a slight contraction during the third quarter of this year, according to figures released by the statistics office on Tuesday.
In quarter-on-quarter seasonally adjusted terms (ZAGDPN=ECI), the seasonally adjusted decline of 0.2% was somewhat more significant than the 0.1% analysts surveyed by Reuters forecasted. This contraction came after two consecutive quarters of expansion.
The most industrialized economy in Africa saw a growth rate of only 0.3% in the first nine months of the year, according to the most recent numbers.
Joe de Beer, who is in charge of economic data at Data South Africa, stated that practically all areas of the economy were neither expanding nor contracting significantly.
He made these remarks during a briefing in Pretoria, the capital of South Africa. “The economy has moved sideways; the numbers are just oscillating around zero.”
Unadjusted year-on-year GDP figures for the third quarter showed a contraction of 0.7% (ZAGDPY=ECI), which was also lower than the 0.2% decline that experts had predicted.
Before that, private investments in renewable energy drove the increase in spending. This is because companies are trying to compensate for the fact that the state utility Eskom has implemented the worst power cuts in the history of the world. On the other hand, this has slowed down.
“In the second quarter, there was a huge surge in imports of green energy-related products, and that wasn’t sustained in the third quarter,” de Beer said.
According to Jason Tuvey, the deputy chief emerging markets economist at Capital Economics, the overall picture was that South Africa’s economic recovery from the COVID-19 epidemic had been among the weakest in developing economies.
In 2024, he forecasted a slight acceleration in the rate of growth. As attempts to enhance supplies begin to yield fruit, the congestion that power disruptions have caused should begin to be alleviated. He stated that fiscal policy would most likely be less restrictive regarding the impending national elections that are anticipated to occur in the first half of 2024. This was about the fact that the election was getting closer.
