The severe bout of load shedding in the first half of December likely catapulted the economy into a recession, Nedbank economists said in a research note on Wednesday (5 February).<\/p>\n
“Even though most high-frequency economic data releases in October and November disappointed, stage 6 blackouts at a time when factories were finalising inventories before closing for the festive season were most likely the straw that broke the
\ncamel\u2019s back,” it said.<\/p>\n
It added that its macro-model indicates a 0.4% quarter-on-quarter contraction in real GDP growth in the Q4 2019.<\/p>\n
“This will likely have been driven by weak household spending growth, a decline in GFCF (Gross fixed capital formation) and a slump in inventories,” it said.<\/p>\n
Nedbank added that its full-year growth estimates have been revised marginally lower in light of deteriorating data, with 2019 growth expected at 0.3%, 2020 growth at 0.8% and 2021 growth at 1.3%.<\/p>\n
The risk is still to the downside, given the possibility of a deep contraction in the secondary sector in Q4, it said.<\/p>\n
A report published by the Efficient Group<\/a><\/strong> in December 2019 indicated that the cost of load shedding has reduced the country’s GDP growth by roughly 0.30% in 2019.<\/p>\n This translates to R8.5 billion of real, inflation-adjusted rand.<\/p>\n