Stats SA says the positive economic growth in 2021 was led by “higher economic activity in finance which contributed 0.9 of a percentage point based on growth of 3.7%; personal services which contributed 0.8 of a percentage point based on growth of 5.3%; and manufacturing which contributed 0.8 of a percentage point based on growth of 6.6%”.
However, economists say 2021’s economic growth could have exceeded the 5% mark had it not been for the events of the July unrest, which cost the country’s economy around R50 billion in damages.
“If that [the July unrest] didn’t happen I think there was a fair chance that the economy would have grown by more 5%,” PwC partner and chief economist Lullu Krugel tells Moneyweb.
“Of course, load shedding is the other very big factor and if we saw less of that last year, we could have well seen the economy grow by significantly more,” says Krugel.
Independent economist Dawie Roodt agrees, adding: “Quite easily we could have pushed it [GDP] above 5%. Not by much, perhaps 5.1% or 5.2% or so.”
“The real bad thing about the unrest … is that the impact of that will be felt for many years to come because every year is going to be a little lower now than what it would have been because of the unrest that we have seen in the last year.”
Investec chief economist Annabel Bishop takes things a step further: “If we hadn’t had that severe negative impact of the riots in July, we wouldn’t have had that depressing impact on business confidence, businesses’ activity and of course [had] the ability to expand even in the quarter.
“We would have seen the GDP growth come out well above 5% for 2021.
“In fact, GDP growth could have come out at 6%,” says Bishop.
Sarb and Treasury forecasts
National Treasury and the South African Reserve Bank (Sarb) previously forecast real economic growth for the year above the 5% mark.
In September the central bank’s Monetary Policy Committee had revised its economic growth forecast for the year to 5.3% (from 4.2%).
National Treasury in the 2021 Medium-Term Budget Policy Statement forecast that the country’s GDP growth would come in at 5.1%, as higher commodity prices propped up the country’s earnings.
With Russia’s attack on the Ukraine now in its second week, economists remain uncertain of the effects the events in Eastern Europe will have on SA’s economic growth.
Krugel tells Moneyweb that global supply chain disruptions, rising food inflation and oil and petrol prices should be the country’s top concerns, as they could have a negative impact on growth.
“There’s really nobody that will [gain] from this uncertainty at the moment and that includes South Africa.”
Bishop echoes Krugel’s sentiments, but points out that the rand could see some gains as a result of the tensions.
“On the positive side, the high commodities prices have benefitted the rand, because South Africa is a key commodities exporter,” Bishop says.
“Obviously not in terms of oil, but if we have a look at other commodities that South Africa does export such as a lot of food and of course as well metals and minerals – this will allow the currency to stabilise and in fact should result in a trade surplus and even a current account surplus potentially for the first quarter of 2022,” she adds.
Listen: Momentum Investments economist Sanisha Packirisamy on SA’s GDP stats