Country Overview
Qualitative overview
- The economy of South Africa is growing slowly, although it is struggling to keep up with population growth, leading to a fall in income per capita. Real GDP witnessed a marginal gain of 0.8% in 2018, primarily due to weakening consumer confidence and a slowdown in exports.
- In an attempt to improve state finances, tax structure encountered changes, particularly the VAT hike from 14% to 15% in 2018, which imposed constraints on consumer spending. Nonetheless, the real value of private final consumption witnessed an increase of 1.8% in the same year.
- The growth in population also led to a slowdown in the employment in rate 2019, rising over the 2018 level of 27.1%. One critical negative influential factor is the low level of labor productivity in South Africa compared to its peers.
Data overview
Socio-economic data
| 2018 | 2023 | CAGR % (2018/2023) | 2028 | CAGR % (2018/2028) | |
|---|---|---|---|---|---|
| Population (‘000) | 57,793 | 61,453 | 1.2% | 64,731 | 0.5% |
| GDP (USD million) | 368,094 | 399,927 | 1.7% | 452,535 | 1.2% |
| GDP per cap (USD) | 6,369 | 6,508 | 0.4% | 6,991 | 0.7% |
| Disposable income (USD million) | 222,112 | 243,659 | 1.9% | 276,104 | 1.3% |
| Median disposable income per household (USD) | 5,747 | 5,476 | -1.0% | 5,593 | 0.2% |
Top 3 cities of South Africa
| Cities | Population (‘000) – 2020 |
|---|---|
| Johannesburg | 5,471 |
| Cape Town | 4,500 |
| Durban | 3,803 |
Age pyramid
Source: Euromonitor International from national statistics/UN
Note: Data for 2030 is forecast
Economic prospects
- The economy of South Africa is set for a gradual recovery. Despite growth rates failing to keep up with the population growth, high unemployment and restricted consumer spending, the economy is expected to recover with the elimination of policy uncertainty around the land reform following the general election, post which, investment is expected to increase. In the coming years, real GDP growth is expected to rise, reaching 1.6 in 2020 and 2.5% each year before 2026. While private consumption is expected to strengthen, high levels of unemployment will likely hamper its growth.
- Inflation in 2019 was in line with the target range for inflation set by the central bank, which is between 3-6%. Low and stable inflation would benefit low-income households, who tend to face the greatest burden of high inflation.
- The contribution of the tourism sector has doubled since the end of apartheid. The industry has been singled out as a priority by the government due to its job creation potential. The real value of inbound tourism receipts witnessed gains in 2019 despite falling by 4.8% in 2018. By 2020, the government aims to raise arrivals to 15 million and create 250,000 jobs.
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