Economic growth revised down to 0.8% for 2023

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The National Treasury has revised down the country’s economic growth forecast from 0.9% to 0.8% in 2023.  It notes that the growth outlook remains constrained due to weak global economic growth and continued energy and logistics constraints.

It further notes that the weaker projection for the year mainly reflects weak household consumption due to higher inflation, elevated interest rates and low net exports.

Godongwana was delivering the Mid-Term Budget Policy Statement in Cape Town.

“In the first half of the year, the economy grew by 0.9 % despite record levels of load shedding. The tourism sector grew more than 70 %  in the period, driven by the arrival of more than 5 million international tourists. Agriculture expanded by 7.8 % in the period compared to 2022, while the construction, transport, and communications sectors also achieved strong growth.”

Municipalities’ debt 

Meanwhile, as of October, 67 municipalities have submitted their applications for the debt relief programme. The debt owed by these municipalities amounts to a staggering R56.8 billion and only 28 of these applications have been approved while the rest are still being vetted.

Godongwana says the purpose of this programme is to transform municipalities in light of the difficult financial conditions they find themselves in.

“The ultimate goal is the profound transformation of these municipalities by empowering them to build financial resilience, amplify their capacity to generate sustainable revenue and rekindle a culture of paying for services rendered.”