Economists agree on one thing – and it’s not good for South Africans

Economists expect GDP growth to improve slightly in 2024 – but not enough to keep up with the growing population.

The Nedbank Group Economic Unit, the International Monetary Fund, Deloitte Africa, and Investec have all predicted that South Africa’s GDP will grow by 1% in 2024.

Although this should beat the expected 0.5% growth seen in 2023, it is not keeping up with the growth in the population.

“South Africa’s population growth rate has been exceeding its economic growth rate, resulting in its individuals becoming poorer, reducing the ability also of government to collect high tax revenues and substantially increase the social wage,” Investec Chief Economist Annabel Bishop said.

Bishop said that the improved global outlook, with the fears of a global recession dying off, resilience from large emerging markets and Asia’s improved overall growth trajectory, should support an acceleration in South Africa’s own growth rate.

However, like the experts mentioned earlier, she said that freight constraints and load shedding will continue into 2024, potentially limiting growth.

In addition, severe crime continues to limit South Africa’s economic performance, with the latest Corruption Perceptions Index (CPI) showing that South Africa’s CPI has dropped over the last five years.

Of the 180 countries on the list, South Africa dropped to its lowest ranking since the index was created, ranking 83rd.

South Africa’s score dropped by two points from 2022, receiving a score of 41/100 in 2023. A score below 50 highlights strong corruption problems.

“The region’s persistent challenges stem from decades of severe underfunding in public sectors, exacerbated by corruption and illicit financial flows siphoning resources away from basic public services,” the report said.

“Corruption will continue to thrive until justice systems can punish wrongdoing and keep governments in check; When justice is bought or politically interfered with, it is the people that suffer,” said the chair of Transparency International, François Valérian.

Bishop said that weak growth of 1.0% will not make any significant inroads in addressing the nation’s high unemployment, nor will anything below 5.0%. However, South Africa is far from seeing this as the state continues to crowd out the private sector economy.

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