By: Johann Els, Old Mutual Chief Group Economist

Statistics South Africa (Stats SA) will release the results of the Gross domestic product (GDP) for the fourth quarter of 2023, at a media briefing to be held on Tuesday, 5 March 2024 in Pretoria tomorrow. Old Mutual Chief Group Economist, Johann Els, has provided an optimistic update on South Africa’s economic performance, highlighting a positive shift in the country’s GDP growth in the fourth quarter of 2023. After a surprising contraction in Q3, the latest data suggests a rebound to positive growth, marking a significant moment for the national economy.

The third quarter of 2023 saw a slight downturn in GDP, recording a -0.2% quarter-on-quarter growth, influenced primarily by a -9.6% decline in agricultural production. However, revisions to high-frequency data for the period, including mining, electricity production, retail sales, and freight transportation, indicate that the economy was closer to positive growth than initially reported. These adjustments suggest that the actual performance of Q3 may have been better, potentially affecting the GDP outcome for Q4.

According to Els, we can expect a rebound in GDP growth for Q4 2023, expected to reach around +0.5%. This positive shift is attributed to significant recoveries in mining and manufacturing sectors, alongside strong growth in electricity production. The agricultural sector is also anticipated to bounce back from its Q3 performance, contributing to the overall economic upswing despite softer trade sectors.

The overall growth for 2023 is projected to be between +0.6% to +0.7%, depending on final Q4 data and potential revisions to Q3 figures. While acknowledging ongoing structural constraints in the economy, Els expresses optimism for 2024, predicting a slight growth rebound to around 1.4%. He further suggests that easing constraints, particularly in electricity and logistics through increased private sector involvement, could elevate underlying growth rates to 2.5% over the medium term.

This could signify a pivotal moment for South Africa, potentially avoiding a recession and setting a foundation for sustained economic recovery. This positive shift in the economic landscape sets the stage for sustained progress, encouraging businesses, investors, and policymakers alike to harness this momentum. As we move forward, the focus remains on strengthening the foundations of our economy, driving towards inclusivity, sustainability, and prosperity for all South Africans. The journey ahead is filled with opportunities, and with the collective effort of every sector, South Africa’s economic resurgence in Q4 is just the beginning of a promising trajectory.