Frequent Blackouts Blamed For Drop In South Africa’s GDP

Rolling blackouts in South Africa are largely responsible for the country’s gross domestic product (GDP) shrinking more than expected, analysts say.

Official data shows a drop of 1.4% between October and December, instead of the 0.4% predicted.

The impact of the power outages was bound to have a knock-on effect on the economy. Only two days of the period from October to December were without power cuts.

Businesses have been paralysed by the disruptions and have seen production costs rise as they have to purchase contingency power.

Seven of South Africa’s 10 industries experienced a decline in the last three months of 2022. The agriculture and mining industries were the biggest victims, both contracting by over 3%.

Overall the South African economy grew by 2% in 2022, but is still well below the 5 to 6% target band that economists say will make a dent in the country’s 33% unemployment rate.