The SA gross domestic product growth figures from 2015 are set to be released this week, and this is sure to be an interesting report to read. The numbers will not be positive according to anyone who has been following the South African economic situation over the past few years, and everyone has to wonder what this data will do to the SA economy overall.
A Bad Streak
The South African economy is looking sadder than it has in a long time, but the signs have been showing for years now. The little over 3% growth rate in 2011 fell down to 2.2% in 2013 and 2012, and dipped even lower in 2014 to 1.5%. This can only say one thing about SA: economic growth is dying a slow and painful death.
Adding further complications to the mix, the per capita incomes of the SA workforce are shrinking. This is due to the fact that the population is growing at a faster rate than the GDP growth is occurring. South Africans are already being pushed financially and working harder than ever to make up the slack. Statistically a typical South African will work for five months out the year just to pay off the taxes incurred. The rate of unemployment does seem to be declining, but this is a poor reflection on the real life employment status of the general public.
Situation Only Getting Worse
These are sobering numbers and the worst part of it all is that growth projections for the coming year are even more pessimistic than the ones already stated. According to economist Jeffrey Schultz of BNP Paribas, “Sadly, the outlook for growth this year … (is) significantly worse.” Inflation is rising at an uncomfortably steep rate, and both manufacturing and production have slowed in recent months. Demand is waning both globally and domestically, and business confidence is lower than ever. The GDP report along with the PMI for the month will shortly be released, and then it will be interesting to see what investors do with the data.