Tuesday, March 21 2023 Sign In   |    Register

News Quick Search



Front Page
Power News
Today's News
Yesterday's News
Week of Mar 20
Week of Mar 13
Week of Mar 06
Week of Feb 27
Week of Feb 20
By Topic
By News Partner
Gas News
News Customization


Pro Plus(+)

Add on products to your professional subscription.
  • Energy Archive News

    Home > News > Power News > News Article

    Share by Email E-mail Printer Friendly Print

    Economists see a 45% chance of a South Africa recession in 2023

    January 17, 2023 - Bloomberg


      Africa's most industrialized economy faces a 45% chance of slipping into recession this year as South Africa's electricity crisis deepens.

      The probability of it happening in the coming 12 months increased from odds of 35% in November, around the start of the longest streak of consecutive daily power cuts. That's according to the latest Bloomberg monthly survey of economists, conducted Jan. 9-12, with 7 economists responding to a question about the chance of a recession.

      The prediction comes as the country's ongoing energy crisis risks intensifying and dim global economic prospects threaten to further curb domestic output. The outlook for South Africa's economy in 2023 "isn't impressive," Finance Minister Enoch Godongwana said last week, citing electricity-supply constraints.

      Eskom Holdings SOC, the state-owned company that produces almost all of South Africa's electricity, has for the past seven days subjected the country to record blackouts - as much as 12 hours a day - to protect the power grid from collapse as its aging, mostly coal-fired power stations fail.

      It has already used up money for diesel supplies allocated to fuel auxiliary plants for the year through March and a unit at its nuclear station is shut down for a revamp, meaning any additional faults among its assets and infrastructure could move South Africa to its highest level of outages yet.

      Sustained outages, known locally as load shedding, at the current "extreme levels" are the most significant downside risk to the country's economic growth prospects, the Bureau for Economic Research's Tracey-Lee Solomon, Romano Harold and Hugo Pienaar said in note published on its website on Monday.

      The economy is unlikely to grow by more than 0.3% quarter-on-quarter through 2023, according to Bloomberg's survey. Economists see gross domestic product growth slowing to 1.2% this year from 2.3% in 2022.

      While inflation is expected to ease, it'll only be back near 4.5% - the midpoint of the central bank's target range at which the monetary policy committee prefers to anchor price-growth expectations - in the fourth quarter, before accelerating again into 2024.

      The South African Reserve Bank will probably extend its most aggressive monetary policy tightening in at least two decades, with the key interest rate rising to 7.5% by the end of the first quarter from 7% now. A gradual easing of borrowing cost will start in the fourth quarter, according to economists. The central bank will give its next decision on the benchmark rate on Jan. 26.



    Other Articles - International


       Home  -  Feedback  -  Contact Us  -  Safe Sender  -  About Energy Central   
    Copyright © 1996-2023 by CyberTech, Inc. All rights reserved.
    Energy Central® and Energy Central Professional® are registered trademarks of CyberTech, Incorporated. Data and information is provided for informational purposes only, and is not intended for trading purposes. CyberTech does not warrant that the information or services of Energy Central will meet any specific requirements; nor will it be error free or uninterrupted; nor shall CyberTech be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use of, operation of, or inability to use Energy Central. Other terms of use may apply. Membership information is confidential and subject to our privacy agreement.