2023 South African GDP forecasts from top economists

Economists warn that electricity shortages, tough global economic conditions, and political uncertainty will dampen South Africa’s economic growth this year.

South Africa’s economy came under pressure in 2022 because of increased load-shedding, the Transnet strike, crumbling rail infrastructure, and a global slowdown.

It caused the International Monetary Fund (IMF), the South African Reserve Bank (SARB), and other institutions to downgrade the country’s economic growth forecast.

The International Monetary Fund downgraded its South African economic growth outlook for 2022 from 2.3% to 2.1%.

The SARB’s forecast of gross domestic product (GDP) growth for 2022 was even lower, ranging between 1.7% and 2.0%.

“This deceleration from the nearly 5% reached in 2021 represents a return towards the trend growth rate, shaped largely by an insufficient supply of energy,” the SARB said.

The downward trend is set to continue in 2023, with more load-shedding and some global trading partners at risk of a recession.

Higher interest rates will put further pressure on the local economy, with the Reserve Bank expected to hike rates in the first half of the year.

So significant is the lack of economic growth that Efficient Group chief economist Dawie Roodt said the country is facing a crisis.

He highlighted that South Africa’s unemployment level is nearly 50%, and the country has rising poverty levels.

Economic growth is the only way out of this debacle, which raises the question of what economists expect in 2023.

South African Reserve Bank – 1.4% GDP Growth

In its October 2022 Monetary Policy Review, the South African Reserve Bank forecasted that the South African economy would expand by 1.4% in 2023 and by 1.7% in 2024.

This growth rate is below the projection of 1.9% for both years at the time of the last Monetary Policy Review, pointing to a gloomier local economic outlook.

Lesetja Kganyago
Reserve Bank governer Lesetja Kganyago

Momentum Investments – 1.1% GDP Growth

Momentum Investments expects South Africa’s GDP growth to slow to 1.1% in 2023 against the backdrop of poor global growth and local headwinds.

Herman van Papendorp and Sanisha Packirisamy said negative political developments, increased load-shedding, and policy uncertainty would hamper growth.

Lower growth in some of South Africa’s main trading partners will also reduce demand for the country’s exports, leaving private demand and investment as the main contributors to growth.

Herman van Papendorp
Momentum Investments head of investment research Herman van Papendorp

Investec – 1.1% GDP Growth

Investec chief economist Annabel Bishop forecasts GDP growth for South Africa at 1.1% for 2023.

“The first quarter is expected to be a weaker one in South Africa, as higher interest rates bite into the financially vulnerable middle-income sector of the consumer base,” she said.

She added that 2023 could see inflation and interest rates surprise lower than expected, but risks remain for growth.

Investec chief economist Annabel Bishop

OECD – 1.1% GDP Growth

The Organisation for Economic Co-operation and Development (OECD) projects that the South African economy will grow by 1.1% in 2023.

“Private consumption and investment will remain the main drivers of growth,” it said in its South African economic forecast summary.

“Private investment will rise as companies replace an increasingly obsolete capital stock. Inflation is projected to slowly fall in response to tighter monetary policy.”

BNP Paribas – 0.2% GDP Growth

Jeff Schultz, a senior economist at BNP Paribas South Africa, has a well-below-consensus 0.2% GDP growth forecast for 2023.

It partly reflects a likely tougher growth year for the global economy, including shallow recessions for some of South Africa’s key trading partners, Europe and the US.

On the local front, the energy supply crunch and rail and port logistics will prevent any meaningful economic growth.

Jeff Schultz – senior economist at BNP Paribas South Africa


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