South Africa’s GDP may be growing, but South Africa is in a per capita recession.
According to Stats SA, South Africa’s GDP recorded 0.1% quarter-on-quarter (qoq) growth in Q4 2023, meaning that the country avoided a technical recession after GDP shrank by 0.2% qoq in Q3.
Across the entirety of 2023, the nation’s GDP saw growth of 0.6%.
The government welcomed the slight increase in GDP, with Minister in the Presidency Khumbudzo Ntshavheni noting that the figure surpasses pre-pandemic levels.
“This indicates a resilient economy showing signs of recovery and bettering previous strength. We are particularly pleased to see the transport, storage, and communication industries leading the growth,” said Ntshavheni.
However, Maarten Ackerman, Chief Economist at Citadel, said that there is no real cause for celebration as the economy is not growing fast enough to keep up with the nation’s population growth.
“Simply put, the economy is growing at around 1%, while the population is growing at around 1.5% to 1.6%. The economy isn’t producing enough goods and services to keep apace, and there is a greater need for social support while unemployment keeps increasing,” said Ackerman.
“Economic growth was flat in the last quarter of 2023. We are sitting at 1.2% year-on-year real unadjusted GDP growth, while the average real GDP growth for 2023 was only 0.6%.”
“Although this is not officially considered a recession, and some are celebrating it, in my view, this is still a very weak economic performance, as we are not outpacing population growth. And this, in fact, implies that we are in a per capita recession.”
Poor for a poor country
Data from the IMF shows that South Africa’s GDP per capita has dropped substantially in recent years.
South Africa’s GDP per capita dropped from $6,680 in 2022 to $6,190 in 2023 – the same level of GDP per capita as 2005.
Moreover,South Africa’s GDP per capita in 2023 now sits below the $6,450 average for an emerging and developing market.
In 2012, the average GDP per capita for an emerging market was $4,620 – only 52% of the average GDP per capita in South Africa, which stood at a record high of $8,800.
Predictions also are negative, with South Africa’s GDP per capita expected to reach a measly $6,920 in 2028.
On the other hand, the average GDP per capita in emerging markets is expected to reach $8,280 in 2028, while the world’s average grows to $16,300.
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