Analysts and forecasters at Oxford Economics Africa have posited that South Africa is on course to be the slowest among major African economies in terms of growth in 2023.
As revealed in its recently released Africa 2023 Outlook, South Africa’s gross domestic product (GDP) is expected to grow by an unimpressive 1% next year, while Senegal is on course to emerge fastest on the continent in terms of economic-growth with a projected GDP growth of 7%.
Senegal’s growth in 2023 will reportedly be greatly driven by the commencement of hydrocarbon exports, coinciding with a period of yet-rising international natural gas prices.
The South African and Angolan economic output share similar projections, with both of them expected to fall below 1% over the four-year period between 2019 and 2023, while growth in Rwanda, Côte d’Ivoire, Tanzania and Ethiopia is expected to be five times higher in 2023 than it was in 2019.
This growth projection is only a bit lower compared to that of the South African Reserve Bank published around the same time. The SA Reserve Bank had rot publish the revised projections because of the continuous hike in inflation, change in commodity prices, lower interests, and the looming possibility for increased load shedding.
Oxford Economics Africa’s head of macroeconomics, Jacques Nel, said: “South Africa will see real exports decline next year due to weak external demand caused by recessions in the eurozone and the US. South Africa is one of the few African countries where manufactured goods make up a significant proportion of exports, and weak demand in Europe in particular will weigh on South African exports.”
Nel also posited that consumer spending will not be as helpful to growth as has been witnessed in previous years, warning instead that it could even be expected to cause notable drawbacks to the country’s GDP.
Consumer prices in South Africa have remained very high all through the year, with headline inflation reaching a 13-year high of 7.8% at its peak time in July, and causing a major negative impact on purchasing power, since it was not balanced out by corresponding improvement in household income.
Interest rates in South Africa has also been on a continuous rise since November 2021 as regulators battle to curb inflation. The Reserve Bank’s latest increase was by 75 basis points hike, as it looks to take the repurchase rate back to pre-pandemic levels of 7%.
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