Government notes the results of the Gross Domestic Product (GDP) for quarter two, as released by the Statistician General. The GDP decreased by 0,7% after two consecutive quarters of positive growth.
It is important to put the conditions of the second quarter into perspective, in that it was a period that was impacted by a number of factors that contributed to the contraction of the GDP. In South Africa, the second quarter was affected by load shedding, the ravaging floods in KwaZulu-Natal and Eastern Cape, higher cost of living and inflation. As indicated by Stats SA, manufacturing is the largest industry in KwaZulu-Natal and the damage caused to factories and plants, and disruptions to logistics and supply chains, decreased national manufacturing output by 5,9%.It was also a heightened period, during which the globe experienced slow economic growth. South Africa like many countries around the world experienced increases in the prices of food, housing and fuel, which were events beyond the control of government.
Minister in The Presidency, Mondli Gungubele, said: “We are concerned about the figures released today. As a country, we have experienced slow growth and rising unemployment. Nonetheless, in the midst of these difficulties, our general public and economy has shown to be strong. There are signs that the economy is on the road to recuperate. The latest employment figures, specifically, bears testament that our plans are beginning to bear fruit.”
According to the latest results published by Stats SA, 648 000 jobs were gained between the first quarter of 2022 and the second quarter of 2022. The figures indicate that the priority areas of the Economic Reconstruction and Recovery Plan such as mass public employment, economic reform and infrastructure development are having an impact on job creation.
Since the national energy plan was announced, government has been working with various stakeholders on implementation and policy reform. The proposed amendment to remove the licensing threshold for electricity generation facilities has been published for public comment. Government is hard at work to increase our energy capacity through private sector generation, which will ensure that the country has constant supply at affordable prices.
In addition, government’s drive to create black industrialists is gaining momentum through sectoral masterplans, which drives localisation that benefits black-owned businesses. As part of government’s Poultry Masterplan, ten black contract growers have been established with an investment of R336 million. The Black Exporters Network further connects black-owned companies in food, engineering products, auto components and beauty products.
Furthermore, to alleviate the burden on motorists’ government introduced the temporary suspension of the general fuel levy to assist in the impact of higher fuel prices during the second quarter. Government extended the temporary reduction of the general fuel levy by R1.50 per litre, which allowed the economy to adjust to the new reality of higher fuel prices from rising crude oil prices. Speaking on the fuel prices Gungubele added: “We also welcome the decrease of the fuel prices as announced by the Department of Mineral Resources and Energy. This was because of lower oil prices and a stronger rand against the Dollar. The news will make it slightly easier for consumers, on the cost of logistics in the country, and provides an opportunity to boost local tourism.”
While only moderate, these gains show that our economy remains robust and that interventions such as the Economic Reconstruction and Recovery Plan are working. The country’s macro-economic interventions have been crucial in restoring financial stability through better revenue collection and fiscal prudence. Government remains confident that through collaborative efforts, and implementation of the ERRP, we can improve our economic growth.
Source: Government of South Africa