Minister in the Presidency, Mondli Gungubele, has expressed concern at the results of the Gross Domestic Product for quarter two, which show that the GDP decreased by 0.7% after two consecutive quarters of positive growth.
“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,” Gungubele said on Tuesday.
The Statistician-General attributed the contraction of the GDP to a number of factors that include load shedding, the floods in KwaZulu-Natal and Eastern Cape, as well as the 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,” the statement issued by the Government Communication and Information System (GCIS) said.
Although the GDP contracted, Gungubele noted that there are signs that the economy is on the road to recovery.
“The latest employment figures, specifically, bear testament that our plans are beginning to bear fruit,” the Minister said.
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,” GCIS said.
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 drive localisation that benefits black-owned businesses.
“As part of government’s Poultry Masterplan, 10 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,” GCIS said.
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.
“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,” Gungubele said.
The GCIS said while only moderate, these gains show that the economy remains robust and that interventions such as the Economic Reconstruction and Recovery Plan (ERRP) 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: South African Government