The economic outlook for South Africa paints a worrying image for the road ahead.
This comes after Finance Minister Enoch Godongwana delivered his Medium Term Budget Policy Statement (MTBPS) earlier on Wednesday.
The minister said that the ongoing energy crisis in South Africa, coupled with logistical issues, the inflation monster that consumers contend with on a daily basis in the country and rising borrowing costs attributed to the ailing economy.
“The economic outlook over the medium term remains weak, reflecting the cumulative effect of power cuts, the poor performance of the logistics sector, high inflation, rising borrowing costs, and a weaker global environment,” Godongwana said.
Economic growth in South Africa is expected to stagnate below 1% this year as activity remained constrained.
The finance boss of South Africa said that the gross domestic product (GDP) outlook had weakened in spite of the 0.9% growth experienced in the first half of the year, and the recovery in sectors such as tourism, agriculture, construction, transport and communications.
“We forecast a 0.8% growth in real GDP in 2023. This is 0.1 percentage points lower than the growth projection at the time of the 2023 Budget,” Godongwana said.
“Growth is projected to average 1.4% from 2024 to 2026. These growth rates are not sufficient to achieve our desired levels of development. However, our economy has shown signs of resilience. Real gross domestic product, a measure of economic performance, is now above pre-pandemic levels,” he said during his MTBPS.