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South Africa is Poor – Even Among Poor Countries

South Africa’s GDP Per Capita in 2023 is lower than the average GDP per capita for emerging markets and developing countries.

According to 2023 data from the IMF, South Africa’s GDP per capita is $6,490, below the average of $6,670 for emerging markets.

For context, in 2013, South Africa’s GDP per capita was $7,460, well above the $5,030 for emerging markets.

As reported by City Press, South Africa’s declining GDP per capita is not linked to a rising population but rather a declining economy.

The appetite for investment in the country is low due to load shedding, policy concerns and high crime levels.

“Despite all the investment summits since 2018, gross capital formation [capital investment] has been in the doldrums. There is no evidence that there is anything happening that can get the economy out of trouble because gross capital formation is one of the core drivers of growth when it is done [properly],” former Statistician-General Dr Pali Lehohla said.

“At the moment, it is happening at a very pedestrian level and there’s nothing to hope for with this casualty.”

A major concern is that emerging markets’ average GDP per capita is predicted to reach $8,690 by 2028.

Whereas South Africa is only expected to reach $7,060 per capita by 2028, far below the $8,800 peak recorded in 2011.

Legend: Green = South Africa; Red = Emerging Markets; Orange = World.

According to the IMF’s data, South Africa is 100th in the world for GDP per capita, sandwiched between Ecuador ($6,640) and Colombia ($6,420).

Luxembourg has the richest people with a GDP per capita of $132,370, while Burundi ($249) is the poorest of the countries with available data.

Despite being seen as the economic powerhouse of Africa, South Africa only has the 6th highest GDP per capita on the continent.

Seychelles ($19,530), Mauritius ($11,540), Equatorial Guinea ($9,770), Gabon ($9,290), Botswana ($7,270) and Libya ($6,760) have a higher GDP per capita than South Africa.

RankCountryGDP per Capita
1Luxembourg$132 370
2Ireland$114 580
3Norway$101 100
4Switzerland$98 770
5Singapore$91 100
6Qatar$83 890
7United States$80 030
8Iceland$75 180
9Denmark$68 830
10Australia$64 960
97Libya $6 760
98Azerbaijan$6 760
99Ecuador$6 640
100South Africa$6 490
101Colombia$6 420
102Moldova$6 340
103Jamaica$6 280
104Iraq$6 180
105Tuvalu$6 010

Concerns for 2023

In March, the IMF lessened its GDP forecast for South Africa to a measly 0.1% for 2023, indicating that the country could soon hit a recession.

However, South Africa was the largest loser among major global economies in the IMF’s April update to its World Economic Outlook, with the nation’s GDP outlook decreased by 1.1 percentage points from the January report.

However, more damning is that South Africa is the biggest loser among all major global economies detailed in the IMF’s report, with its GDP outlook shaved by 1.1 percentage points from the January report.

Japan is the only other major economy close to South Africa, with the IMF slashing Japan’s growth by a 0.5 percentage point.

The IMF’s projection of economic growth is the most negative among financial groups, tied with Nedbank’s estimate of 0.1%.

The South African Reserve Bank’s outlook currently stands at 0.3%, adjusting its January forecast of 0.3% in February to 0.2% in March.

Despite no major institutions predicting negative growth for the year, it is difficult to find anyone looking beyond the 0.0%-0.5% range – except for National Treasy, who have predicted 0.9% growth for the year.

Source : Business Tech