SA may have averted technical recession in Q4 of 2023: Analysts

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Some analysts suggest that South Africa may have managed to avoid a technical recession in the fourth quarter of 2023. This as Statistics South Africa is set to disclose the country’s growth numbers today.

They anticipate a moderate increase in the Gross Domestic Product (GDP) following a 0.2% contraction in the third quarter last year.

Laura Campbell, a senior economist at Econometrix, expects growth of around 0.7% for 2023 as a whole, following growth of 1.9% in 2022. She says government needs to keep load shedding at bay and improve the capacity of transporting goods around the country to realise improved economic growth.

“Despite current economic woes we’re expecting that GDP growth for the fourth quarter will show a slight increase on a quarter-on-quarter basis. So in Q3, GDP contracted by 0,2% and we’re now expecting that there will have been marginal growth recorded in the fourth quarter, substantial investment in renewable energy, less intense load shedding in Q4 and the dissipation of the avian flu over that quarter may have provided some support to GDP, while port blockages will have weighed on GDP in the period.”

Independent Economist Elize Kruger says real GDP growth is forecast at 0.4% in the fourth quarter of 2023 and is expected to remain at a low level for 2023 as a whole.

“The South African economy is definitely expected to avert a technical recession with positive growth numbers in the quarter. On the positive side, sectors that are expected to contribute positively are the mining sector, manufacturing, transport, communication, and the finance and real estate sectors, among others. The ones that will remain negative in my view, are the wholesale and retail trade sectors, whereas I expect the construction and agricultural sectors to move sideways. Overall, this will seal the GDP 2023 growth number in real terms at 0,6% in my view.”

Economists divided on Q4 GDP results: