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South Africa’s economy will grow a modest 0,3 percent this year, softened by a mild contraction this quarter, but will gain just enough momentum in coming quarters to avoid a recession, a Reuters poll predicted on Thursday.
However, electricity shortages have added a large uncertainty around forecasting currency moves and economic growth.
This quarter the economy probably contracted 0,7 percent in year-on-year seasonally-adjusted terms, but a recovery of 0,5 percent was expected in the third quarter followed by 1,1 percent growth in the final quarter, the poll showed.
Gross domestic product (GDP) in Africa’s most industrialised economy expanded 2 percent last year and the most pessimistic forecast in the poll was for a 0,8 percent contraction this year, while the most optimistic expected a 0,9 percent expansion.
Independent economist Elize Kruger said her forecast for 2023 was slightly above market consensus as it seemed the economy was somewhat more resilient than expected amid numerous headwinds.
“The major drive to mitigate the impact of load shedding is stimulating some areas in the economy, for example solar component suppliers, electricians etc,” added Kruger.
South Africa’s electricity minister on Tuesday said the nation was seeking affordable solar panels, wind turbines, battery storage and renewables technology from China, as it struggles to put an end to a crippling energy crisis.
Although this type of expenditure – known as “forced capex” – takes away available funds that could have been spent elsewhere in the economy, it is still spending and acts as somewhat of an offsetting factor for sluggishness elsewhere.-News24
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