What does the South African economic climate hold in store in 2024? Image: File/Fotor
How does the South African economic climate look in 2024?
From mounting debt, to the influence of elections, we look into our crystal ball to forecast the South Africa economic climate in 2024.
What does the South African economic climate hold in store in 2024? Image: File/Fotor
No surprises for guessing the South African economic climate for 2024 is looking pretty rocky at first glance. Economists are predicting a sluggish 1% growth in 2024 as the South African economic climate battles both global and domestic challenges.
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Business Tech reports that the United Nations’ (UN) World Economic Situation and Prospects report for 2024 believes South Africa’s debt crisis is likely to worsen. Plus, extreme weather and global conflicts will bring uncertainty to the local economy during the year.
SOUTH AFRICAN ECONOMIC CLIMATE IN 2024
The UN report outlined the South African economic climate in 2024 as such. “The economic outlook is bleak at present, due to South Africa’s ongoing electricity crisis, exacerbated by underinvestment in renewable energy,” said the UN.
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Furthermore, the report touches on South Africa’s high unemployment and low labour force. Youth unemployment currently sits at over 60%, and this remain a massive challenge for Mzansi. Additionally, high levels of national debt and rising interest rates rendered only 0.5% GDP growth in 2023. At best, we can hope this will improve to 1.0% growth in 2024, say economists.
NARROW TAX BASE
Similarly, the South African economic climate in 2024 will be hamstrung by structural vulnerabilities in the economy, says the UN report. These include:
- A weak taxation framework.
- Narrow tax base supporting a welfare state.
- Inadequate institutional capacity.
- Ineffective fiscal policy reforms.
- High public debt and a low domestic revenue base.
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As a result, Daily Investor has its eyes set on a 1% year-on-year growth for the South Africa in 2024. This is according to the chief economist at Investec, Annabel Bishop.
INTEREST RATE CUT FOR 2024
Bishop hopes Mzansi will see the start of an interest rate-cutting cycle in 2024. Lower inflation, reduction of congestion at the ports and better electricity supply will also go some way to buoy the economy.
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What do you predict for the South African economic climate in 2024? Be sure to share your thoughts with our audience in the comments section below. And don’t forget to follow us @TheSANews on X and The South African on Facebook for the latest updates.
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