The Real Economy Bulletin - Fourth Quarter 2021

Main Bulletin: The Real Economy Bulletin - Fourth Quarter 2021

In this edition

GDP growth: The GDP expanded by 1.2% in the fourth quarter of 2021, bringing growth for 2021 as a whole to 4.9%, despite the 1.7% contraction in the third quarter and the COVID-19 surge in December. Read more.

Employment: Statistics South Africa has delayed publication of the Quarterly Labour Force Survey (QLFS) for the fourth quarter of 2021 indefinitely because of a low response rate. The alternative source of information on formal employment, the Quarterly Employment Survey (QES), has since reported a 0.5% increase for the third quarter of 2021. The QES provides far less information than the QLFS on employment by industry, region, race and gender, so the resurrection of the QLFS, based on in-person interviews, is crucial for economic decision-making and monitoring in the future. Read more.

International trade: The surplus on the balance of trade for goods continued to drift downward as commodity prices flattened out and the cost of petroleum climbed in the fourth quarter of 2021. The impact of the Russian invasion on commodity prices may disrupt these trends in 2022. Read more.

Investment: Private investment climbed 4.2% in the fourth quarter of 2021, although it remained 9% below pre-pandemic levels. Public investment declined, ending the year 10% lower than before the pandemic. Read more.

Foreign direct investment projects: The TIPS Foreign Direct Investment Tracker monitors FDI projects on a quarterly basis, using published investment information. It identified 24 new projects in the fourth quarter of 2021. The 24 projects reported entailed a total investment value of approximately R126 billion. The bulk came from a single manufacturing project, a US$4.6 billion (R70.5 billion) green ammonia export plant. Most of the other projects fall under the fifth window of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Read more.

Briefing Note: The Ukraine war and the South African economy: The war in the Ukraine has vastly increased uncertainty for the global economy, and consequently for South Africa. The war itself will have limited impact on trade because South Africa has only very limited economic ties to Russia and Ukraine. But it has already led to extreme volatility in commodity prices, affecting both export products and as well as petroleum, wheat and fertiliser imports. It seems likely to disrupt international capital markets as well. In the longer run, it may prove a significant drag on growth in the global North, which is still South Africa’s main export market. Read the Briefing Note online: The Ukraine war and the South African economy.

Briefing Note: Towards an inclusive rollout of electric vehicles in South Africa: mobility is high. The world is rapidly moving towards e-mobility. Pushed by environmental regulations, support programmes and improving economics, electric vehicles (EVs) that is traditional hybrid (HEV), plug-in hybrid (PHEV) and battery electric (BEV) vehicles, are set to become dominant in the coming decades. Yet this electric revolution risks leaving many commuters behind, further deepening inequalities between and within countries. The risk of an exclusionary, elitist transition to e-mobility is high. Read the Briefing Note online: Towards an inclusive rollout of electric vehicles in South Africa.