South African Economy Sinks Below Pre-Pandemic Levels
South Africa’s economy tumbled below pre-pandemic levels in the last three months of 2022 as record power shortages hit activity, official data on Tuesday showed.
The gross domestic product of Africa’s most industrialised country contracted by 1.3 percent in the fourth quarter, worse than expected by analysts.
“After rallying in the third quarter of 2022 … GDP fell below pre-pandemic levels,” said the national statistics agency StatsSA.
The economy had expanded by 1.6 percent in the July-to-September period.
Growth in Africa’s most industrialised country was weighed down in the final quarter by unprecedented levels of power outages.
Only two days were spared by the staggered blackouts during the last three months of last year.
Outages cost more that $50-million in lost output each day, according to estimates by the energy minister.
The blackouts are blamed on the 100-year-old state energy firm Eskom which produces about 90 percent of the country’s energy needs.
Eskom is saddled with constantly breaking down generating plants and is failing to meet demand.
The trade and finance sectors were the biggest drags to the economy’s growth between October and December, with exports decreasing by 4.8 percent. Mining agriculture and manufacturing also slumped.