Better-than-expected mining and manufacturing output contributed to first-quarter growth in South Africa, counteracting the negative effects of slower new-vehicle sales and Eskom’s electricity generation failures, Bloomberg reports.
It said a median estimate of seven economists in a Bloomberg survey conducted between 5 and 11 May is for a quarterly GDP expansion of 0.2%, compared with 0.1% forecast in April.
Bloomberg adds, however, that the BankservAfrica Economic Transactions Index, an early indicator of economic activity, has signaled the probability of a negative quarter-on-quarter number for the first three months of 2023, after GDP contracted by 1.3% in the final quarter of 2022.
Economic growth would have been stronger without Eskom’s load-shedding, implemented on 89 days in the first quarter: the same number of days as during the previous three months, but at a higher intensity.
Bloomberg reports that the SA Reserve Bank forecasts that power cuts will shave two percentage points off GDP growth this year. The cuts have contributed to the depreciation of the rand, which has stoked inflation.
The news agency notes that the currency has declined by more than 11% in 2023, making it the second-worst-performing emerging-market currency against the dollar after Argentina’s peso, of those tracked by Bloomberg.
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