Breaking news: South Africa’s GDP growth halves to 0.5% amid post-election chaos

on Jun 4, 2024
  • The embattled South African economy just got another shock.
  • The nation's economy has contracted 0.1% month-on-month, said GDP figures today.
  • Meanwhile, year-on-year growth has more than halved to 0.5%.

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The South African government released its Q1 2024 gross domestic product (GDP) figures for the nation this morning.

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The numbers were grim enough to be something of a shock for markets: Unadjusted year-on-year GDP for SA was revealed to be 0.5% growth for the quarter – less than half of last year’s 1.2% growth.

Meanwhile, the country’s month-over-month GDP figures showed a 0.1% contraction MoM in GDP.

“The motor vehicles and other transport equipment division and the basic iron and steel, non-ferrous metal products, metal products and machinery division made the largest negative contributions to the decrease in the first quarter,” said Statistics South Africa in a press release.

The website also recently announced, in its May wrap-up of South Africa’s economic statistics, that the country’s unemployment rate is currently at its highest level in a year – 32.9%.

Market expectations

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Prior to today’s GDP figures being announced, year-over-year GDP growth for the country was expected to halve by analysts, dropping from 1.2% growth for Q1 2023 to just 0.6% growth for Q1 this year.

Today’s GDP figures proved this to be accurate, and more – the economy’s growth by SA decreased 0.1% more than expected to just 0.5% growth YoY.

Month-over-month GDP was expected to grow 0.1% in May 2024. However, against expectations, it instead fell 0.1%.

Adding fuel to the post-election fire

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South Africa has been in the spotlight recently, thanks to the headline-making results of its 2024 national election, the results of which were published this past week.

In what was a historic development for the country, ruling party the African National Congress (ANC) lost its leading majority of the vote for the first time since 1994, when the political party ousted the Apartheid regime in the country’s first-ever democratic elections.

The ANC is expected to announce a coalition with another political party soon, in order to remain in power.

The new GDP figures are unlikely to help the air of uncertainty in Africa’s richest nation.

South Africa ZAR Africa Economic Political