The Real Economy Bulletin - Fourth Quarter 2018 

Main Bulletin: The Real Economy Bulletin - Fourth Quarter 2018

In this edition

GDP growth: South Africa’s GDP grew by an estimated 0.3% in the fourth quarter of 2018, after expanding 0.6% in the third quarter. For the year, the GDP grew 0.8%. Manufacturing and agriculture continue to grow, but construction and mining struggled. Read more.

Employment: The economy as a whole generated 360 000 jobs in the year to the fourth quarter of 2018, mostly in the informal sector and domestic work. Employment in manufacturing, mining and agriculture remained essentially flat, while construction reportedly created 90 000 mostly informal jobs over the year. Read more.

International trade: South Africa’s balance of trade strengthened in the fourth quarter, mainly due to a fall in imports while exports increased. The economy typically runs surpluses during periods of slow growth, as seen in the past three years. Read more

Investment and profitability: The decline in public investment, which has contributed to slower GDP growth since 2015, continued in 2018. In contrast, private investment picked up somewhat, although it remained below levels achieved before the commodity boom ended in 2012. Read more

Foreign direct investment projects: Eighteen new projects were added to the TIPS Foreign Direct Investment (FDI) Tracker in the past quarter. Some of these projects were announced during the Investment Conference held in October 2018 while others date back before it. Read more

Briefing note: The 2019 budget and industrialisation: The 2019 Budget faced tough choices. In the end, National Treasury prioritised core social services, infrastructure, and rescuing Eskom while avoiding an excessive increase in the national debt. The trade-off is a squeeze on industrial policy programmes, which will see cuts in real terms. Read the briefing note online: The 2019 budget and industrialisation.

Briefing note: Unlocking the potential of renewable energy for public sector and communities:  Historically, South Africa's electricity mix has relied heavily on cheap and readily accessible coal, with the country's electricity being provided through Eskom's vertically-integrated model. In 2011, the country opened up space in the electricity generation sector for private sector participation, through the Renewable Energy Independent Power Producer Procurement Programme. While this introduced renewable energy technologies into South Africa, the approach effectively locked renewable energy in the private sector, excluding Eskom, municipalities and consumers from renewable energy generation.Read the briefing note online: Unlocking the potential of renewable energy.