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Electricity and South Africa’s economic outlook

South Africa’s energy crisis constrains economic growth but may also hold opportunities for rejuvenating investment. Load-shedding occurs when there is too little electricity supply available to meet demand. The higher the incidence of load-shedding, the greater the cost to the economy. Its impact across sectors varies and is non-linear – it is easier to mitigate load-shedding in some sectors than in others. In the first instalment of a two-part series that looks at South Africa’s energy crisis, we focus on load-shedding and its cost to GDP.

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Recent Releases



The FNB/BER Civil Confidence Index increased to a more than six-year high of 42 in 2023Q1, from 31 in 2022Q4. Sentiment has now improved for four consecutive quarters. Underpinning the improved sentiment was a marked increase in activity, which also boosted profitability.

The Absa PMI rose to 49.8 index points in April 2023 from 48.1 in March. Despite the improvement, the index failed to edge back above the neutral 50-point mark as business activity and new sales orders worsened relative to March. Indeed, the headline PMI would have deteriorated further if not for a significant improvement in the inventories index. The underlying survey results suggest that the sector experienced another tough month at the start of the second quarter amid intense load-shedding hurting output, and demand remaining under pressure.

The RMB/BER Business Confidence Index (BCI) declined further from 38 in the fourth quarter to 36 in the first quarter of 2023. While the outcome could have been worse given the severity of power outages and the associated drop-off in business activity, the result is nonetheless disappointing. The business mood certainly remains gloomy.

Having recovered from -20 to -8 index points during the fourth quarter of 2022, the FNB/BER Consumer Confidence Index (CCI) plunged to -23 index points during the first quarter of 2023. The reading of -23 is the third lowest CCI reading on record since 1994 and indicates extreme concern among consumers about South Africa’s economic prospects and household finances.