In this edition

GDP growth: The GDP eked out a 0.1% increase in the fourth quarter of 2023, reversing the decline in the third quarter. For the year, growth came to 0.6%, driven almost exclusively by business and personal services. Mining was flat for the year, manufacturing shrank by 0.1%, and agriculture by 0.4%. Most of the growth occurred in the first half of 2023, with losses in the second half. Read more.

Employment: Employment grew by 800 000 or almost 5% in 2023, far more rapidly than the GDP or the working-aged population. The informal sector expanded particularly rapidly, but formal employment also climbed. In contrast, domestic work continued to stagnate. Construction employment reportedly grew particularly rapidly, apparently mostly due to investment in housing rather than infrastructure. Read more.

International trade: South Africa maintained a trade surplus in the fourth quarter of 2023, but its value fell by half from the previous quarter. Platinum and coal revenues dropped sharply as world prices plummeted in the past year. Still, mining revenues remain well above pre-pandemic levels in constant rand terms, which contributed to the resilience of the South African economy in the face of domestic and external headwinds. In manufacturing, the auto industry accounted for most of the increase in exports, followed at a considerable distance by food and metal products. Read more.

Investment and profitability: Investment climbed 4% in 2023, for the second year of growth since the pandemic downturn. It was still well below pre-pandemic levels, however. State-owned companies remain a weak point. At industry level, investment has climbed steadily in mining and manufacturing, as well as most other sectors, since 2021. It remains depressed in electricity and water, however. Read more.

Foreign direct investment projects: The TIPS Foreign Direct Investment Tracker monitors FDI projects quarterly, using published investment information. The Tracker added 23 projects in the fourth quarter of 2023. Projected investment for the quarter amounts to R476.7 billion, recorded from 10 projects. The other 13 projects have not yet reported the respective project values. The Tracker updated 27 existing projects this quarter. Read more

Briefing Note: The budget and industrial policy- by Neva Makgetla. The recent budget was not good news for industrialisation. In particular, it brought deep cuts to funding for the Department of Trade, Industry and Competition (dtic), especially for industry-level incentives. More broadly, the economic vision that framed the national budget downplayed efforts to promote more inclusive industrialisation. Read the Briefing Note online: The budget and industrial policy

Briefing Note: CBAM and South African exports - by Seutame Maimele. Although the European Union’s Carbon Border Adjustment Mechanism (CBAM) is pursuing the critical aim of reducing carbon emissions and to avoid carbon leakage, arguably it throws unfair burdens on the Global South. In response, the South African government has begun to challenge CBAM in any form and at many forums. At the same time, government and exporters have to find ways to mitigate the impacts of CBAM by developing the required systems to report on greenhouse gas emissions and finding ways to reduce the carbon intensity of exports. Read the Briefing Note online: CBAM and South African exports