South Africa’s GDP contracted by 1.3% in the fourth quarter of 2022, much more than expected.
Analysts predicted a 0.4% decline, blaming the record blackouts for taking a significant toll on productivity.
The impact of rolling blackouts was bound to have an economic impact. Only two days in the fourth quarter were power outages.
Businesses have been paralyzed by the disruptions and have seen production costs rise as they have to purchase contingency power.
In the last three months of 2022, seven of South Africa’s ten industries experienced a decline. Agriculture and mining were the worst hit, both contracting by more than 3%.
South Africa’s economy grew by 2% in 2022, but this is still well below the 5 to 6% target band that economists believe will make a dent in the country’s 33% unemployment rate.
