While the 0.6% growth of the South African economy during the second quarter (April – June) of 2023 “does make a dent”, an economist says it is unlikely the momentum would be sustained for the rest of the year.
Speaking in an interview on Salaamedia, a senior research analyst at Nedbank, Reezwana Sumad, said, “Obviously, the higher the growth rate, the better for employment prospects, tax collection and overall prosperity in the economy.”
She added, “It does indicate that the economy is a little more resilient than we initially expected.”
According to Statistics South Africa (Stats SA), the economy extended its gains for a second consecutive time in Q2. Manufacturing and finance were among six industries which showed substantial growth during that period.
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Loadshedding
However, the caveat was that the country experienced slightly less loadshedding during the period of the second quarter. This, she said, allowed industries to increase production. But signs of worsening loadshedding in the current quarter meant this growth was likely unsustainable.
“As a result of lower stages of loadshedding, we did see manufacturers and miners, essentially our heavy energy users, take advantage of more energy availability by producing more.”
South Africa is experiencing Stage 6 loadshedding as the third quarter draws to a close. With uncertainty over electricity supply likely to remain through to the end of the year, [Name] says they are not expecting economic growth to be maintained.
