The Economic Environment in South Africa
South Africa’s economic freedom score is 56.2, making its economy the 112th freest in the 2022 global Index and 17th among the 47 African countries.
- Inflation rate is very moderate. The most recent annual inflation rate reported (October 2022) is 7.5%, 7.6% as the previous rate.
- As of 2021,GDP is $419.95B (2nd in Africa) with a growth rate of 4.9%(18th in Africa) . In 2021, the Real GDP (PPP) was $865.82B.
- GDP per Capita is $6,994.20 (6th in Africa) with an annual per capita growth of 3.6% (2021) as well as GDP per Capita, PPP was $13,126.01 making it the 7th highest in Africa and surpassing Africa’s average of $5774.58
- The Gini index coefficient is 63% (2014), ranked 1 globally.
- GDP per Capita is $6,994.20 with an annual per capita growth of 3.6% (2021)
- Credit Ratings: Fitch rating – BB- (2021), Moody’s rating -Ba2 (2022), S&P rating – BB- (2022).
- Business Freedom Index for South Africa is 66 points, above Africa’s average of 46 points sitting 2nd in Africa and 63rd globally (2022).
- Policy rate as of June 2022 is 4.75%, an annual increase of 3.50%.
- South Africa has a Cost of Living Index of 70.41 points, making it the 11th highest in Africa (the continent’s average point of 59.81) and 82nd highest globally (2017).
- The Business Confidence indicator value for South Africa is -16.00 as of 2Q22, indicating a level of pessimism.
Export and Import Commodities:
- Major Export commodities in 2019 are gold, platinum, cars, iron products, coal, manganese, and diamonds. Major Import Commodities in 2019 are crude petroleum, refined petroleum, cars and vehicle parts, gold, and broadcasting equipment.
- South Africa has the lowest rating Cost of Starting a Business in Africa after Rwanda. That is, 0.2% of income per capita, 52nd in Africa and 182 out of 186 globally (2020).
Unemployment
- Unemployment is high and has an upward trend. The most recently reported unemployment rate as of 2021 is 33.6% making it the highest rate globally.
- South Africa has the 3rd global highest female unemployment rate of 35.68% (2021) and leads the global chart for male unemployment at 31.84%.
- With a 54.87% labor force participation rate (ranked 39 in Africa and 140 globally), only 14.91 million are employed as of 1Q22.
Currency and Bank Credit
- The value of the local currency is worsening and there has been 21.83% appreciation of the USD over the past one year. The most recently reported (October 2022) exchange rate is ZAR 18.12 per US$1.
- Interest rate as of October 2022 is 6.5%, the same as the previous month.
- The Corporate tax rate as of December 2021 is 28%, as well as the Personal Income Tax rate, was also 45%.
- Investment Freedom Index for South Africa is 45 points, below Africa’s avaerage of 51 points sitting 38th in Africa and 135th globally (2022).
- South Africa’s Bank credit to households as of June 2022 is 1946.10 Billion rands, a 6.83% increase in the last year.
- Bank Credit to private non-financial firms is 1943.09 Billion rands as of June 2022, a 9.76% increase over the last 12 months.
