South Africa

Private sector gives hope for South African GDP growth

In a new report, financial advisory firm PwC said the outlook for GDP growth in South Africa in 2024 is somewhat better if private energy investment results in less frequent load-shedding.

The firm expects only 0.3% growth for 2023 but said the outlook for 2024 is more optimistic based on the premise that South Africa will see a turning point or peak in the extent of load-shedding this year.

Most experts are unanimous in expecting less than 1.0% GDP growth for South Africa in 2023, with some expecting no economic growth for the year.

Large institutions share this sentiment, with many having revised their predictions downward due to the intensity of load-shedding seen in 2023.

The IMF said earlier this year that it expects South Africa’s real GDP growth to decelerate to 0.1% in 2023, mainly due to load-shedding. 

S&P Global also recently revised their growth expectations for South Africa, going from the predicted 0.8% to only 0.6%. The agency cited the country’s energy and logistics crises as the main contributing factors.

The South African Reserve Bank said in May that it expected 280 days of load-shedding in 2023 and warned that power cuts to reduce real GDP growth this year by two percentage points.  

The Reserve Bank increased its GDP growth outlook for 2023 in May, but it still only expects 0.3% growth this year.

In another PwC survey, six out of ten CEOs in South Africa also expected a decline in economic growth locally and globally this year.

SA CEOs’ economic growth outlook for 2023 vs. 2022

PwC’s baseline view is for South Africa’s real GDP growth of only 0.3% this year. The firm’s upside scenario only reaches 0.7% growth, while its downside scenario predicts a GDP contraction of -0.5%.

The firm’s outlook for 2024 is somewhat more optimistic. It expects the economy to grow by 0.9% next year or as high as 1.3% under an upside scenario.

This more positive outlook is attributed to the significant private investment currently seen and planned in alternative electricity supply in South Africa.

According to PwC, Operation Vulindlela is tracking a pipeline of 10,000 MW in private sector energy generation projects. 

“The positive impact that this will have on the power supply in the country and on individual business operations makes for a more positive economic growth outlook for 2024 and beyond,” it said. 


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