South Africa’s economic growth to double in 2024

Respected financial institutions worldwide and in South Africa have projected that the country’s economy will grow at an average of 1.2% in 2024.

In 2023, South Africa’s economy grew by only 0.6%, but many believe 2024 will be a better year for growth.

Daily Investor looked at the GDP growth expectations of eight large, well-respected institutions, both globally and locally, to see what South Africans can expect this year.

These institutions were the National Treasury, the South African Reserve Bank (SARB), the International Monetary Fund (IMF), the World Bank, and South Africa’s Big Four Banks – Absa, Standard Bank, FNB and Nedbank.

There was some deviation between the institutions’ projections, with their expectations ranging from 0.9% to 1.3%.

The highest projection was given by FNB and the National Treasury, which predicted real GDP growth of 1.3%.

In the February 2024 Budget, the National Treasury said GDP growth has averaged only 0.8% since 2012, and this rate is insufficient to address high levels of unemployment and poverty.

“Long-term growth is highly dependent on improving capacity in energy, freight rail and ports and on continuing to reduce structural barriers to economic activity,” it said.

“The economic growth strategy prioritises macroeconomic stability, structural reforms and improvements in state capability to raise growth rates in a sustainable manner.”

The SARB predicts 1.2% GDP growth for South Africa in 2024 and attributed the country’s low growth in 2023 to supply-side problems.

It explained that electricity load-shedding was worse than in previous years and 2023 also saw the emergence of port and rail problems.

The SARB said its forecasts indicate a modest growth acceleration from this year as these supply-side constraints relax. 

“While we estimate electricity shortages took 1.5 percentage points off GDP last year, we think this will moderate to 0.6 percentage points this year and 0.2 percentage points in 2025,” it said.

In particular, it expects the load-shedding burden will ease somewhat this year.

The World Bank also predicted 1.2% growth for South Africa this year and pointed to structural constraints that are holding the country back.

“South Africa’s GDP has recovered to its pre-pandemic levels, but the strength of the recovery has been hindered by multiple structural constraints, including ongoing power shortages and logistics bottlenecks,” it said. 

The IMF’s latest World Economic Outlook, published in April this year, provided the lowest GDP estimate.

2024 started with a bleak outlook for South Africa when the IMF slashed its growth outlook for the country to 1% in January, down from 1.8% expected back in October 2023 at the time of its last assessment.

The January update was a stop-gap between the IMF’s official reports, with the April outlook setting the tone for the rest of the year.

The fund has now cut South Africa’s growth outlook further, taking off another 0.1 percentage points to 0.9% for the year.

Below is an overview of the GDP growth projections from the institutions mentioned above.

Institution	2024 GDP Growth Expectations (%)
National Treasury	1.3
South African Reserve Bank	1.2
International Monetary Fund	0.9
World Bank	1.2
FNB	1.3
Absa	1.1
Standard Bank	1.2
Nedbank	1.0
Average	1.2