South Africa narrowly avoids recession in Q4 amid sluggish growth

South Africa’s economy narrowly avoided a technical recession in the fourth quarter of last year, according to the latest data released on Tuesday.

Figures unveiled by Statistics South Africa showed that the economy grew by just 0.1 per cent on a quarterly basis, following a 0.2 per cent contraction in Q3.

A recession is defined as two consecutive quarters of falling economic output, so it was averted by the narrowest of margins.

As a whole, real annual GDP grew 0.6 per cent in 2023, in line with a National Treasury forecast, but nevertheless a significant slowdown from 2022’s 1.9 per cent growth.

Economists generally are forecasting GDP growth for 2024 to be somewhere between 0.7 and 1.5 per cent.

This is woefully insufficient to enable the government to address major challenges including extremely high levels of unemployment, poverty, and inequality.

All these are issues that are of major concern to voters as the country heads into what is expected to be the most highly-contested national and provincial elections the country has seen.

The Africa Center for Strategic Studies says the elections represent an assessment on how the ruling African National Congress (ANC) is addressing the evolving social and economic challenges facing the country.

Analysts are predicting the 29 May polls will see the ANC lose its parliamentary majority for the first time since the end of apartheid.