South Africa’s economy narrowly avoided slipping into a technical recession in the fourth quarter of 2023, primarily bolstered by the resurgence in the mining sector.
According to Statistics South Africa’s report released in Pretoria, the country’s gross domestic product (GDP) expanded by 0.1% from October to December, a shift from the 0.2% contraction recorded in the preceding quarter.
This growth, however modest, fell short of the 0.2% median estimate projected by economists in a Bloomberg survey.
The mining industry emerged as a pivotal force in driving South Africa’s economic rebound during the final quarter.
Fewer rotational power cuts, which had plagued the nation’s energy infrastructure in earlier periods, catalyzed a resurgence in energy-intensive sectors, notably mining.
In addition to mining, sectors such as finance and transportation also contributed to the country’s tepid growth in the fourth quarter.
However, no single sector made a significant positive or negative impact on the economy, according to Joe de Beer, the deputy director-general of economic statistics at Statistics South Africa.
Despite this narrowly avoided recession, South Africa’s economic trajectory remains restrained.
Challenges persist, including logistical impediments at state-owned port and rail operator Transnet SOC Ltd., which disrupted exports and supply chains throughout the year.
Moreover, frequent power cuts continue to hamper economic activity, presenting hurdles to sustained growth.
While the economy managed to sidestep recessionary pressures, the National Treasury’s projection of 1.3% growth for the current year underscores the ongoing need for substantial improvements to address unemployment and poverty plaguing the nation.
