GDP in South Africa
South Africa - GDP
Load-shedding leaves South Africa’s economy reeling in Q1
South Africa’s economy slumped at the outset of the year, contracting sharply in seasonally-adjusted and annualized (saar) terms. According to Statistics South Africa, on a quarter-on-quarter basis and at market prices, first-quarter output fell 3.2% saar (Q4 2018: +1.4% saar). Analysts were surprised; they had expected a more modest downturn. In unadjusted terms and on a year-on-year basis, growth was flat (Q4 2018: +1.1% year-on-year). On the supply side, load-shedding weighed heavily on mining- and manufacturing-sector output, while one-off factors appeared to bruise agricultural-sector output.
A demand-side breakdown, meanwhile, revealed the extent to which this year’s rolling blackouts took their toll on the economy. On a quarter-on-quarter basis, household spending dropped 0.8% saar (Q4 2018: +3.2% saar) amid waning economic sentiment and an uptick in the unemployment rate. Government spending, which rose 1.3% saar (Q4 2018: +0.6% saar), was unable to offset this. Fixed investment, meanwhile, fell for the fifth quarter in a row (Q1: -4.5% saar; Q4 2018: -2.5% saar) as economic uncertainty continued to deter non-residential outlays.
Net exports were equally downbeat. Exports of goods and services tumbled 26.4% saar (Q4 2018: +11.1% saar) on weaker motor vehicle sales. Imports of goods and services, meanwhile, slipped 4.8% (Q4 2018: -16.0% saar). Taken together, foreign trade subtracted 6.7 percentage points from the headline reading—a far cry from the 8.0-percentage-point addition in the fourth quarter of last year.
Commenting on the first-quarter reading, Andrew Matheny, an analyst at Goldman Sachs, noted:
“We draw [some] conclusions […]: (1) load-shedding seemed to weigh more heavily on growth than our estimates implied; [and] (2) weak confidence (as well as load-shedding) appear to have held back household consumption by more than we anticipated. […] We mechanically revise down our forecast for full-year GDP growth for 2019 from 1.5% to 0.6%, but maintain our forecast for 2020 growth unchanged at 2.5%. Given the pattern of weakness in heavy industry and exports, as well as ongoing risks of renewed load-shedding, risk to both forecasts are tilted to the downside.”
The SARB expects the economy to grow 1.0% in 2019 and 1.8% in 2020. FocusEconomics analysts, on the other hand, are still taking recent events into account. A new Consensus Forecast will be released on 18 June.
South Africa - GDP Data
|Economic Growth (GDP, annual variation in %)||2.5||1.8||1.2||0.4||1.4|
5 years of economic forecasts for more than 30 economic indicators.
South Africa GDP Chart
Source: South African Reserve Bank
South Africa Facts
|Bond Yield||8.32||0.29 %||Jul 31|
|Exchange Rate||14.17||-0.21 %||Jul 31|
|Stock Market||0.1||-0.44 %||Jul 31|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
August 16, 2019
On 16 August, the rand traded at 15.23 per USD, a 8.7% depreciation from the same day in July.
August 8, 2019
The manufacturing sector shrank in June for the first time since September 2018.
August 5, 2019
In July, the IHS Markit Purchasing Managers’ Index (PMI) slid to 48.4 in July from 49.7 in June.
July 24, 2019
Consumer prices rose 0.4% over the previous month in June, marginally up from a 0.3% month-on-month upturn in May.
July 18, 2019
At its meeting ending 18 July, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) unanimously opted to cut the repurchase rate by 25 basis points to 6.50%, after holding rates for eight months.