News One Hundred and Seventy-five: South Africa’s economy shrinks by more than expected

South Africa’s gross domestic product shrank by 1.3% in the fourth quarter of 2022, much more than was expected.

Analysts had predicted a decline of just 0.4%, and blamed the record blackouts for taking a significant toll on productivity.

The impact of the rolling blackouts was bound to have a knock-on effect on the economy. Only two days of the fourth quarter were without power cuts.

Businesses have been paralysed by the disruptions and have seen production costs rise as they have to purchase contingency power.

Seven of South Africa’s 10 industries experienced a decline in the last three months of 2022. The agriculture and mining industries were the biggest victims, both contracting by over 3%.

Overall the South African economy grew by 2% in 2022, but is still well below the 5 to 6% target band that economists say will make a dent in the country’s 33% unemployment rate.