South Africa’s economy is Africa’s third largest, as well as the continent’s most industrialized, technologically advanced, and diverse economy. South Africa is one of just eight countries in Africa with an upper-middle-income economy. Following the lifting of international sanctions in 1996, South Africa’s Gross Domestic Product (nominal) nearly tripled, reaching a high of US$416 billion in 2011. Since then, it has dropped to around $317 billion in 2021. Within two decades of the end of apartheid, foreign exchange reserves expanded from US$3 billion to approximately US$50 billion, resulting in a diversified economy with a growing and sizeable middle class.
Although the natural resource extraction industry remains one of the country’s largest, contributing US$13.5 billion to GDP annually, South Africa’s economy has diversified since the end of apartheid, with a focus on services. The financial sector contributed $41.4 billion to South Africa’s GDP in 2019. South African financial institutions managed around US$1.41 trillion in assets in 2021. As of October 2021, the Johannesburg Stock Exchange’s entire market capitalization was US$1.28 trillion.
South Africa’s state-owned companies (SOEs) play a vital part in the country’s economy, with the government owning a stake in roughly 700 SOEs in a variety of industries. In 2016, inefficient government bureaucracy, tight labor restrictions, a shortage of skilled personnel for several high-tech businesses, political instability, and corruption were the top five hurdles to conducting business in the country. The banking industry, on the other hand, was evaluated as a significant positive feature of the economy. The country is a member of the G20 and the only African country in the organization.
What is South Africa’s GDP and GNP?
In September 2021, South Africa’s Gross National Product (GNP) was estimated to be 103.730 USD billion. This is down from the prior figure of 107.327 USD billion for June 2021. South Africa’s Gross National Product (GNP) data is updated quarterly, with 247 observations from Mar 1960 to Sep 2021, average 29.102 USD bn.
What is the current state of GDP?
Retail and wholesale trade industries led the increase in private inventory investment. The largest contributor to retail was inventory investment by automobile dealers. Increases in both products and services contributed to the increase in exports. Consumer products, industrial supplies and materials, and foods, feeds, and beverages were the biggest contributions to the growth in goods exports. Travel was the driving force behind the increase in service exports. The rise in PCE was mostly due to an increase in services, with health care, recreation, and transportation accounting for the majority of the increase. The increase in nonresidential fixed investment was mostly due to a rise in intellectual property items, which was partially offset by a drop in structures.
The reduction in federal spending was mostly due to lower defense spending on intermediate goods and services. State and local government spending fell as a result of lower consumption (driven by state and local government employee remuneration, particularly education) and gross investment (led by new educational structures). The rise in imports was mostly due to a rise in goods (led by non-food and non-automotive consumer goods, as well as capital goods).
After gaining 2.3 percent in the third quarter, real GDP increased by 6.9% in the fourth quarter. The fourth-quarter increase in real GDP was primarily due to an increase in exports, as well as increases in private inventory investment and PCE, as well as smaller decreases in residential fixed investment and federal government spending, which were partially offset by a decrease in state and local government spending. Imports have increased.
In the fourth quarter, current dollar GDP climbed 14.3% on an annual basis, or $790.1 billion, to $23.99 trillion. GDP climbed by 8.4%, or $461.3 billion, in the third quarter (table 1 and table 3).
In the fourth quarter, the price index for gross domestic purchases climbed 6.9%, compared to 5.6 percent in the third quarter (table 4). The PCE price index climbed by 6.5 percent, compared to a 5.3 percent gain in the previous quarter. The PCE price index grew 4.9 percent excluding food and energy expenses, compared to 4.6 percent overall.
Personal Income
In the fourth quarter, current-dollar personal income climbed by $106.3 billion, compared to $127.9 billion in the third quarter. Increases in compensation (driven by private earnings and salaries), personal income receipts on assets, and rental income partially offset a decline in personal current transfer receipts (particularly, government social assistance) (table 8). Following the end of pandemic-related unemployment programs, the fall in government social benefits was more than offset by a decrease in unemployment insurance.
In the fourth quarter, disposable personal income grew $14.1 billion, or 0.3 percent, compared to $36.7 billion, or 0.8 percent, in the third quarter. Real disposable personal income fell 5.8%, compared to a 4.3 percent drop in the previous quarter.
In the fourth quarter, personal savings totaled $1.34 trillion, compared to $1.72 trillion in the third quarter. In the fourth quarter, the personal saving rate (savings as a percentage of disposable personal income) was 7.4 percent, down from 9.5 percent in the third quarter.
GDP for 2021
In 2021, real GDP climbed 5.7 percent (from the 2020 annual level to the 2021 annual level), compared to a 3.4 percent fall in 2020. (table 1). In 2021, all major subcomponents of real GDP increased, led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports have risen (table 2).
PCE increased as both products and services increased in value. “Other” nondurable items (including games and toys as well as medications), apparel and footwear, and recreational goods and automobiles were the major contributors within goods. Food services and accommodations, as well as health care, were the most significant contributors to services. Increases in equipment (dominated by information processing equipment) and intellectual property items (driven by software as well as research and development) partially offset a reduction in structures in nonresidential fixed investment (widespread across most categories). The rise in exports was due to an increase in products (mostly non-automotive capital goods), which was somewhat offset by a drop in services (led by travel as well as royalties and license fees). The increase in residential fixed investment was primarily due to the development of new single-family homes. An increase in wholesale commerce led to an increase in private inventory investment (mainly in durable goods industries).
In 2021, current-dollar GDP expanded by 10.0 percent, or $2.10 trillion, to $22.99 trillion, compared to 2.2 percent, or $478.9 billion, in 2020. (tables 1 and 3).
In 2021, the price index for gross domestic purchases climbed by 3.9 percent, compared to 1.2 percent in 2020. (table 4). Similarly, the PCE price index grew 3.9 percent, compared to 1.2 percent in the previous quarter. The PCE price index climbed 3.3 percent excluding food and energy expenses, compared to 1.4 percent overall.
Real GDP rose 5.5 percent from the fourth quarter of 2020 to the fourth quarter of 2021 (table 6), compared to a 2.3 percent fall from the fourth quarter of 2019 to the fourth quarter of 2020.
From the fourth quarter of 2020 to the fourth quarter of 2021, the price index for gross domestic purchases grew 5.5 percent, compared to 1.4 percent from the fourth quarter of 2019 to the fourth quarter of 2020. The PCE price index climbed by 5.5 percent, compared to 1.2 percent for the year. The PCE price index increased 4.6 percent excluding food and energy, compared to 1.4 percent overall.
Source Data for the Advance Estimate
A Technical Note that is issued with the news release on BEA’s website contains information on the source data and major assumptions utilized in the advance estimate. Each version comes with a thorough “Key Source Data and Assumptions” file. Refer to the “Additional Details” section below for information on GDP updates.
Which African country has the highest GDP?
African countries’ GDP in 2021, broken down each country. Nigeria has the greatest gross domestic output in Africa, with a GDP of 514 billion dollars in 2021. Egypt’s GDP was worth 394 billion dollars, making it the continent’s second-highest.
What will South Africa’s GDP be in 2022?
According to our econometric models, the GDP of South Africa is expected to trend around 345.00 USD billion in 2022.
What accounts for South Africa’s low GDP?
South Africa’s political transformation is regarded as one of the century’s most stunning political achievements. Since 1994, the ruling African National Congress (ANC) has guided policy until August 2016, when the country held the most competitive local government election in its history, in which the ANC lost majority support in four of the country’s main towns. The ANC has been deposed in Pretoria and Nelson Mandela Bay as a result of coalition accords signed by political parties. The most recent general elections were place in May 2019, with the next local government elections set for November 1, 2021.
The COVID-19 (coronavirus) pandemic is having a significant influence on South Africa’s economy, resulting in a 6.4 percent contraction in 2020, as the pandemic weighed hard on both foreign demand and containment efforts implemented by the government. With 2 million people living below the poverty line for upper-middle income countries, based on $5.5 per day in 2011 Purchasing Power Parity exchange rates, PPP, this severe contraction is expected to exacerbate poverty.
After a decade of low development, the South African economy was already in poor shape when the pandemic struck. The economy increased by 0.1 percent in 2019, owing in part to the revival of load shedding due to operational and financial challenges at Eskom, the energy company. The positive global environment (growth of trade partners and commodity prices) will aid South Africa’s economic recovery in 2021. Pre-existing structural impediments, such as electricity shortages, are, nonetheless, still a drag on the medium-term prospects. In 2021, the economy is predicted to increase at a rate of 4.0 percent. Commodity prices will continue to be crucial for South Africa, which is a large net producer of minerals and a net importer of oil. However, boosting investment, notably foreign direct investment, will be critical for accelerating growth and creating jobs.
Since its democratic transition in the mid-1990s, South Africa has achieved significant progress in improving the well-being of its population, but progress has slowed in the last decade. Between 2005 and 2010, the percentage of the population living in poverty in an upper-middle-income country declined from 68 percent to 56 percent, but has since trended slightly upwards to 57 percent in 2015, and is expected to reach 60 percent in 2020.
Progress in eliminating poverty has been hampered by structural problems and insufficient growth, which have been exacerbated by the COVID-19 epidemic. Rising unemployment, which hit an all-time high of 34.4 percent in the second quarter of 2021, is significantly limiting improvements in household welfare. Youths between the ages of 15 and 24 have the greatest unemployment rate, at roughly 64%.
With a consumption expenditure Gini coefficient of 0.63 in 2015, South Africa remains a dual economy with one of the world’s highest and most persistent inequality rates. A legacy of exclusion, as well as the nature of economic growth, which is not pro-poor and does not generate enough jobs, contribute to high inequality. Wealth inequality is much larger, and intergenerational mobility is minimal, implying that inequities are passed down from generation to generation with little change.
In South Africa, how is GDP calculated?
Statistics South Africa (Stats SA) releases two methods for calculating real GDP growth: first, seasonally adjusted and annualized quarterly growth; and second, unadjusted year-on-year quarterly growth.
What is the value of the South African economy?
It is an important indication of a country’s economic strength. South Africa’s GDP is expected to be at 335.34 billion dollars in 2020.
How is the South African economy today?
In 2019, South Africa’s real GDP increased by 0.2 percent. The epidemic, as well as the containment efforts taken to stop the virus from spreading, wreaked havoc on the economy. Construction, transportation and communication, manufacturing, and mining all declined by 8.2 percent in 2020, resulting in a drop in real GDP. On the demand side, all components decreased, with investment contracting by the most, 32.4 percent. To aid firms and households affected by the pandemic, the Reserve Bank of South Africa lowered the policy rate by 300 basis points in 2020, from 6.5 percent to 3.5 percent. Inflation is expected to fall to 3.4 percent in 2020, staying within the reserve bank’s goal range of 3 percent to 6%. The budget deficit is expected to rise to more than 14% of GDP, owing primarily to expenditure requirements to mitigate the economic impact of the pandemic. Because of the high price of gold it exports, a low bill for fuel imports, and growing agricultural exports, the country will achieve its first current account surplus in 2020, expected to be around 1% of GDP. Despite the epidemic, the banking system in South Africa is healthy, with a capital ratio of 16.3 percent, which is more than the regulation requirement of 10%. Domestic lending to the private sector increased by 3.5 percent to $280 billion in November 2020, from 139 percent of GDP in December 2019. The three major credit rating agencies downgraded South Africa’s domestic and foreign currency credit ratings to subinvestment grade due to persistent economic problems. Nonetheless, in the third quarter of 2020, real private investment increased by 33.2 percent. Due to the severity of the epidemic and legacy challenges of low human development, social indicators are expected to stay inadequate. Since March 2020, over 2.6 million individuals have lost their jobs, raising the unemployment rate to 30.8 percent in September 2020, up from 23.3 percent in December 2019.
Due to persistent structural constraints such as inconsistent electricity supply and work rules, real GDP growth is expected to rise to 3.0% in 2021, but the rate of recovery will decrease to 1.6 percent in 2022. Inflation is forecast to average 4.2 percent in 2021, remaining within the reserve banks’ goal range of 3 percent to 6 percent in 2022. The current account surplus is projected to dwindle as oil prices rise, thereby raising the import bill. In the medium term, public debt might reach more than 90% of GDP, with forecasts of it stabilizing at 95% in 2026. In October 2020, the 2020 Medium Term Budget Policy Statement (MTBPS) forecasted a much higher budget deficit and a slower debt consolidation in the medium term. Due to the high debt-service costs and worsening balance sheets of state-owned companies, as well as the persistent financial problems of municipalities, these projections will increase risks.
Over a five-year period, the 2020 MTBPS outlined ways to cut the public sector wage bill and state-owned company investment in order to narrow the budget deficit and stabilize the debt-to-GDP ratio. Through 202324, the Treasury plans to save about $1.8 billion on the wage bill, which is the primary source of the fiscal imbalance. The move has already increased the likelihood of widespread strikes among the 1.3 million public employees. Demands for government-guaranteed debt to support increased levels of capital investment will also be resisted. This might force South African Airways to declare bankruptcy and force Eskom to implement cost-based pricing, which would be efficient but unpopular. South Africa’s government pledged to investing in public utilities by 2020, with significant private sector engagement. South Africa’s gross international reserves rose marginally from $52.4 billion at the end of March 2020, enough to cover 6.9 months of imports, to $53.8 billion at the end of November 2020, enough to cover 8.3 months of imports. This improvement is primarily due to foreign borrowings received on behalf of the government from multilateral banks, especially the African Development Bank, in order to deal with the pandemic problem.
What will be the GDP in 2021?
In addition to updated fourth-quarter projections, today’s announcement includes revised third-quarter 2021 wages and salaries, personal taxes, and government social insurance contributions, all based on new data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and wages climbed by $306.8 billion in the third quarter, up $27.7 billion from the previous estimate. With the addition of this new statistics, real gross domestic income is now anticipated to have climbed 6.4 percent in the third quarter, a 0.6 percentage point gain over the prior estimate.
In 2021, real GDP climbed by 5.7 percent, unchanged from the previous estimate (from the 2020 annual level to the 2021 annual level), compared to a 3.4 percent fall in 2020. (table 1). In 2021, all major components of real GDP increased, led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports have risen (table 2).
In 2021, current-dollar GDP climbed by 10.1 percent (revised), or $2.10 trillion, to $23.00 trillion, compared to 2.2 percent, or $478.9 billion, in 2020. (tables 1 and 3).
In 2021, the price index for gross domestic purchases climbed 3.9 percent, which was unchanged from the previous forecast, compared to 1.2 percent in 2020. (table 4). Similarly, the PCE price index grew 3.9 percent, which was unchanged from the previous estimate, compared to a 1.2 percent gain. With food and energy prices excluded, the PCE price index grew 3.3 percent, unchanged from the previous estimate, compared to 1.4 percent.
Real GDP grew 5.6 (revised) percent from the fourth quarter of 2020 to the fourth quarter of 2021 (table 6), compared to a fall of 2.3 percent from the fourth quarter of 2019 to the fourth quarter of 2020.
From the fourth quarter of 2020 to the fourth quarter of 2021, the price index for gross domestic purchases climbed 5.6 percent (revised), compared to 1.4 percent from the fourth quarter of 2019 to the fourth quarter of 2020. The PCE price index grew 5.5 percent, unchanged from the previous estimate, versus a 1.2 percent increase. The PCE price index grew 4.6 percent excluding food and energy, which was unchanged from the previous estimate, compared to 1.4 percent.