South Africa

South Africa Economic Forecast

South Africa Economic Outlook

Quarter-on-quarter GDP growth markedly overshot market expectations in Q2, accelerating to 0.6% (Q1: +0.4% s.a. qoq). That said, ongoing power blackouts and the logistics crisis continued to hold back the economy, restraining growth. The quarterly improvement was driven by stronger growth in both fixed investment and public spending more than offsetting declining private consumption—which accounts for roughly two-thirds of GDP. In Q3, our panelists expect the economy to flatline; July’s state budget shortfall exceeded market expectations and was the largest since at least 2004, which pressured the rand, increased bond yields and heightened the country’s vulnerability to external shocks. In response, the government is working on a plan to cut spending; however, unions have threatened to strike if the government introduces austerity measures, which would hamper activity.

South Africa Inflation

In July, inflation receded more than markets had anticipated, falling to a two-year low of 4.7% (June: 5.4%) and thus moving closer to the mid-point of the South Africa Reserve Bank (SARB)’s 3.0–6.0% target band. In the remainder of 2023, inflation will inch down to hover slightly above the mid-point of the SARB’s target range amid high unemployment and interest rates.

This chart displays Economic Growth (GDP, annual variation in %) for South Africa from 2013 to 2022.

South Africa Economic Data

2018 2019 2020 2021 2022
Population (million) 57.9 58.8 59.6 60.1 60.6
GDP (USD bn) 405 389 338 420 405
GDP per capita (USD) 6,987 6,625 5,676 6,980 6,681
GDP (ZAR bn) 5,363 5,625 5,568 6,209 6,629
Economic Growth (Nominal GDP, ann. var. %) 5.6 4.9 -1.0 11.5 6.8
Economic Growth (GDP, ann. var. %) 1.6 0.3 -6.0 4.7 1.9
Domestic Demand (ann. var. %) 2.0 1.1 -7.8 5.0 3.9
Private Consumption (ann. var. %) 3.2 1.3 -6.1 5.8 2.5
Government Consumption (ann. var. %) 1.1 1.8 0.9 0.5 1.0
Fixed Investment (ann. var. %) -1.2 -1.7 -14.6 0.6 4.8
Exports (G&S, ann. var. %) 2.7 -3.3 -12.0 9.1 7.4
Imports (G&S, ann. var. %) 3.5 0.6 -17.6 9.6 14.9
Manufacturing production (ann. var. %) 1.0 -1.1 -12.5 6.1 -0.3
Retail Sales (ann. var. %) 2.4 1.6 -6.9 6.5 1.8
Wages (ann. var. %) 4.9 4.0 0.8 7.3 3.9
Unemployment (% of active population, aop) 27.1 28.7 29.2 34.3 33.5
Fiscal Balance (% of GDP) -4.3 -6.1 -9.8 -5.1 -4.5
Public Debt (% of GDP) 51.5 56.1 68.8 68.8 71.1
Inflation (CPI, ann. var. %, eop) 4.5 4.0 3.1 5.9 7.2
Inflation (CPI, ann. var. %, aop) 4.6 4.1 3.3 4.6 6.9
Inflation (PPI, ann. var. %, aop) 5.4 4.6 2.5 7.1 14.4
SARB Repo Rate (%, eop) 6.75 6.50 3.50 3.75 7.00
3-Month JIBAR (%, eop) 7.61 7.16 3.87 3.85 6.50
10-Year Bond Yield (%, eop) 9.44 9.02 9.70 9.82 11.30
Stock Market (ann. var. of JSE %) -11.4 8.2 4.1 24.1 -0.9
Exchange Rate (ZAR per USD, eop) 14.39 13.98 14.69 15.96 17.02
Exchange Rate (ZAR per USD, aop) 13.25 14.45 16.45 14.79 16.37
Current Account Balance (USD bn) -11.9 -10.1 6.6 15.3 -1.8
Current Account Balance (% of GDP) -2.9 -2.6 1.9 3.7 -0.5
Merchandise Trade Balance (USD bn) 2.0 2.5 17.5 30.2 13.7
Merchandise Exports (USD bn) 94.3 90.0 84.7 121.5 123.2
Merchandise Imports (USD bn) 92.3 87.5 67.2 91.3 109.5
Merchandise Exports (ann. var. %) 7.4 -4.6 -5.9 43.5 1.4
Merchandise Imports (ann. var. %) 10.8 -5.2 -23.2 35.9 19.9
Foreign Direct Investment (USD bn) 5.4 5.1 3.1 40.9 9.1
International Reserves (USD bn) 50.4 47.5 42.3 54.0 55.3
International Reserves (months of imports) 6.6 6.5 7.6 7.1 6.1
External Debt (USD bn) 173 185 170 161 165
External Debt (% of GDP) 42.6 47.6 50.4 38.2 40.8

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