fbpx

Our economy’s best performance in 14 years

We know, we know: It’s hard to think of “South Africa’s economy” and “good news” in the same breath, but trust us on this one – there is some reason to celebrate. 

It centres on the GDP, a measure of how big our economy is; that is, how many goods and services are being sold. Stats SA measures it every three months and on Tuesday released the data for the end of 2021. This means we now have the full picture for 2021 and it’s good news: last year saw our biggest annual growth in 14 years. 

For the full year, GDP expanded at 4.9%, the biggest increase since 2007 – before the global financial crisis. That’s a huge improvement from the 6.4% contraction in 2020 (that dark year that we don’t like talking about).

But it’s not all sunshine, as our wallets and petrol gauges attest. We needed more growth: the bigger the economy, the more jobs and money going around. 

The crappy bit is that there’s plenty ahead to threaten 2021’s fragile growth. Ongoing local bugbears like power cuts (thanks Eskom) and now the war brewing in Europe (thanks Russia) pose a threat to further growth. Plus, last year’s positive growth could have been even better if it wasn’t for the July looting and ongoing service delivery and policy problems. 
There is also a concern about a “jobless recovery”. That means, we have all this growth, but no jobs to show for it. It’s a general problem with SA’s economy: professional services like finance have increasingly dominated our economy and are responsible for this growth, while historical sectors like mining have declined. Our job market just isn’t keeping up (thanks, SA education). We have loads of unskilled workers but a fair number of vacancies for highly skilled jobs. You can read or watch more about this issue – and what we can do about it – in our previous explainer here. (WhatsApp readers, check the PDF for the link).

This article appeared as part of The Wrap, 10 March  2022. Sign up to receive our weekly updates.