The Real Economy Bulletin - First Quarter 2022

Main Bulletin: The Real Economy Bulletin - First Quarter 2022

In this edition

GDP growth: The GDP expanded almost 2% in the first quarter of 2022, bringing the GDP back to pre-pandemic levels. GDP growth has become far more volatile since the pandemic, however. Moreover, significant differences persist between sectors, with agriculture showing the strongest recovery and construction by far the weakest. Read more.

Employment: The available employment data suggest that the jobs recovery has lagged well behind the GDP, especially for lower-level formal employees and domestic workers. The number of employers and self-employed people has also dropped sharply. The employment data became significantly less reliable during the pandemic, however, because public-health concerns affected labour force surveys. Read more.

International trade: In the first quarter of 2022, the balance of trade remained positive but declined by almost half compared to the previous quarter. The fall mostly resulted from the spike in petroleum prices internationally, despite strength in the prices of South Africa’s main mining exports over most of the quarter. Read more.

Investment: Investment remained 6% below pre-pandemic levels, despite some recovery from the middle of 2021. It rose 4.1% in the first quarter of 2022, with a 4.9% increase in government investment and 4.1% in private investment, which is far larger. State-owned corporations cut their investment by 1.1%, however. In mining, profits fell with global prices but were still much higher than in the late 2010s. Manufacturing returns remained strong. Read more.  

Foreign direct investment projects: The TIPS Foreign Direct Investment Tracker monitors FDI projects on a quarterly basis, using published investment information. The total investment value from projects captured this quarter was R96.1 billion. Some of the projects captured in this quarter were announced at the 2022 South African Investment Conference. Read more.

Briefing Note: The European Union's Carbon Border Adjustment Mechanism (CBAM) and its impact on South African exports: The CBAM is a headline policy initiative of the European Green Deal. It levies a tax on greenhouse gases embedded in products imported into the EU to stop industries from shifting production to jurisdictions with weaker carbon pricing and regulation. It will function in parallel with and mirror the EU’s Emission Trading Scheme. The CBAM will gradually replace the current mechanisms used to address carbon leakage, specifically free allocationsmarket. Read the Briefing Note online: The European Union's Carbon Boarder Adjustment Mechanism (CBAM) and its impact on South African exports.

Briefing Note: Understanding localisation: Localisation has become a buzzword in industrial policy in South Africa, appearing in departmental strategies, Parliamentary debates, and National Economic Development and Labour Council (NEDLAC) agreements. For most people, however, it remains poorly defined, although the Department of Trade, Industry and Competition has published some useful guidelines. Read the Briefing Note online: Understanding localisation