Home Economics TAKE STOCK | Is SA in a recession? Economists say...

TAKE STOCK | Is SA in a recession? Economists say no, but also yes

 TAKE STOCK |  Is SA in a recession?  Economists say no, but also yes


Way too early to say

There are many jokes about economists. To help explain this, while not a joke, Friedrich von Hayek said in his speech to a Nobel Prize banquet in 1974 that he actually didn’t think economists should be awarded the prize.

He had a deeper point about the risks of politicizing authority in the often nebulous social sciences, which he certainly didn’t think was a joke.

But still, here’s a real joke. How many economists does it take to replace a light bulb?

No. It’s one of those newfangled LED types and is fine. Realizing this, an unknown number of economists run off to adjust their models.

But unlike jokes about lawyers or politicians, the jokes about economists tend to the actual professional subject, not their ethics. But the politics of it can be seen in how people react to things like GDP figures.

SA recently received new figures on this. SA’s statistics (pre-revision) show that SA’s GDP grew 0.4% quarter on quarter in the first three months of the year – that’s the most important figure – and is seasonally adjusted real growth (SA also has four ).

However, the nominal (meaning in name only) figure, excluding inflation and seasons, was R35 billion lower, meaning there was actually less money (the actual thing behind the name) flying around. But before you accuse Stats SA of doing something unreliable to make people with a monopoly on violence happy (de jure or nominal), in the fourth quarter nominal GDP was R1 billion higher, but real GDP was still falling (a surprise and revised) 1.1%.

Therefore, in both real and nominal terms, SA has avoided a technical recession until at least the end of the second quarter, nominal, or third, in real terms. A technical recession is two consecutive quarters of “negative growth,” a descriptive if not subjective term, but it’s hardly an exciting number to talk about unemployment in threes.

Still, that’s the science of it, not a recession. But is SA in some kind of recession, at least one? Maybe a lot? Probably yes, or definitely.

Back to bleak science, albeit a little more relativistic. The International Monetary Fund (IMF, trending on SA Twitter on Thursday) is forecasting SA growth of 0.1% in 2023, versus 2% for the world as a whole. If the economists hit their KPAs this year, it means SA will outperform Germany (down 0.3% and the UK, down 0.1%). It will probably do much better than Sri Lanka too, you really hope so.

But even if it’s science, it’s a few examples, and socially, a better approximation might include the numbers of people. In social terms, this IMF forecast probably sums it up:

IMF 2023 article IV consultation report, p57

Tweet of the day

Chart of the day

Number of the day


The drop in GDP per capita that the IMF expects for South Africa in 2023, with growth reaching 0.3% in 2024.


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