Global Courant 2023-05-07 12:00:33
South Africa’s GDP per capita in 2023 will be lower than the average GDP per capita for emerging markets and developing countries.
According to 2023 data from the IMFSouth Africa’s GDP per capita is $6,490, below the $6,670 average for emerging markets.
For context, in 2013 South Africa’s GDP per capita was $7,460, well above $5,030 for emerging markets.
As reported by City PressSouth Africa’s declining GDP per capita is not linked to a rising population, but rather to a declining economy.
The willingness to invest in the country is low due to tax outflows, policy concerns and high crime levels.
“Despite all the investment freezes since 2018, gross capital formation (capital investment) is in the doldrums. There is no evidence that anything is happening to pull the economy out of trouble, because gross capital formation is one of the main drivers of growth, if done (the right way),” said former statistician general Dr Pali Lehohla.
“Right now it’s happening at a very pedestrian level and there’s nothing to hope for with this victim.”
A major concern is that the average GDP per capita of emerging markets is expected to reach $8,690 by 2028.
While South Africa is not expected to reach $7,060 per capita until 2028, well below the peak of $8,800 recorded in 2011.
Legend: Green = South Africa; Red = emerging markets; Orange = World.
According to IMF data, South Africa ranks 100th in the world for GDP per capita, sandwiched between Ecuador ($6,640) and Colombia ($6,420).
Luxembourg has the richest people with a GDP per capita of $132,370, while Burundi ($249) is the poorest of the countries with available data.
Despite being seen as Africa’s economic powerhouse, South Africa has only the 6th highest GDP per capita on the continent.
Seychelles ($19,530), Mauritius ($11,540), Equatorial Guinea ($9,770), Gabon ($9,290), Botswana ($7,270), and Libya ($6,760) have higher GDP per capita than South Africa .
Rank Country GDP per capita 1 Luxembourg $132,370 2 Ireland $114,580 3 NORWAY $101,100 4 SWITZERLAND $98,770 5 Singapore $91,100 6 Qatar $83,890 7 United States $80,030 8 Iceland $75,180 9 Denmark $68 830 10 Austral 98 Azerbaijan $6 760 99 Ecuador $6 640 100 South Africa $6 490 101 Colombia $6 420 102 Moldova $6 340 103 Jamaica $6 280 104 Iraq $6 180 105 Tuvalu $6 010
Caring for 2023
In March, the IMF cut its GDP forecast for South Africa to a measly 0.1% for 2023, signaling that the country could soon slip into recession.
However, South Africa was the biggest loser of the major world economies in the IMF’s April update of its World Economic Outlook, with the country’s GDP outlook falling 1.1 percentage points from its January report.
More devastatingly, however, South Africa is the biggest loser of all the major world economies detailed in the IMF’s report, with a GDP outlook shaved 1.1 percentage points from the January report.
Japan is the only other major economy close to South Africa, with the IMF cutting Japan’s growth by 0.5 percentage points.
The IMF’s projection of economic growth is the most negative among financial groups, in line with Nedbank’s estimate of 0.1%.
The South African Reserve Bank’s outlook currently stands at 0.3%, revising its January forecast from 0.3% in February to 0.2% in March.
Despite no major institutions forecasting negative growth for the year, it’s hard to find anyone looking beyond the 0.0%-0.5% – except for National Treasy, which posted 0.9% growth. predicted for the year.
Read: Edge hot on heels as markets hold their breath
