2023 – Economists’ Predictions

With 2023 in full swing already, we would like to thank you for your continued support by choosing us with your journey to financial freedom. May this year be a blessing to you and your family!

We had a look at what some of the country’s top economists predict for the year to come. To combat the negative outlook, we also added some money savvy tips.

Economic Growth

Financial services company BNP Paribas said that South Africa will likely see weak economic growth in 2023 as the country faces global headwinds and further domestic challenges.

The company estimates 2023 GDP growth to reach 0.2% – reflecting a weaker net trade and consumption outlook.

“On top of this black growth view, we expect inflation to remain sticky for longer as the lagged effect of higher wages and rebounding service prices eat into disposable incomes, forcing more action out of the SARB (South African Reserve Bank),” said BNP Paribas.

Combined with low expected growth, the group said that stagflation risks loom large in South Africa. Stagflation refers to a period of economic hardship characterized by stagnant economic growth, high unemployment, and rising prices (inflation). Stagflation can be particularly damaging as it can lead to a decline in living standards and a decrease in investment, further inhibiting long-term economic growth.

This year in South Africa will be tougher economically than 2022, said BNP Paribas. Key trading partners such as Europe and the US are also expected to face headwinds.

The long-standing energy insecurity domestically is likely to intensify – halting economic progress even more.

Labour and inflation

Like other countries across the globe, South Africa faces disinflation in 2023, particularly in the second half of the year. This is not the first warning of stagflation in South Africa. In May2022, the SARB noted that global stagflation is one of the major concerns for the economy.

The central bank said that continuous slow and inequitable growth, rising inflation, and extra pressure on key sectors of the financial system would all result from stagflation.

Jeff Schultz, said in November2022, that the Reserve Bank would unlikely slow down on rate hikes, contributing further to a rough period of stagflation.

Most economists forecast an average CPI rate of 6.0% in 2023 after 6.9% in 2022 – implying two straight years at or above the SARB’s less-desired upper 6% target bank. Until food and public transport price rises move out of the double-digit territory, inflation expectations will struggle to lower.

With high unemployment a key driver of stagflation, higher wage demands places additional pressure on the economy.

Interest Rates

Prominent economists expect the South African Reserve Bank (SARB) to increase rates twice in the first half of 2023.

In November 2022, the SARB’s Monetary Policy Committee (MPC) increased the repo rate by 0.75 basis points to 7%. It was the eighth interest rate hike in the current cycle, with a total of 350 basis points increase since the hike cycle started a year ago in November 2021.

The Reserve Bank is expected to continue increasing rates as there are still concerns about inflation.

Nedbank chief economist Nicky Weimar predicts two more 25 basis point rate hikes within the first half of 2023.


BNP Paribas forecasts more than 200 days of load shedding in 2023, mostly between stages 3 and 4 – compared to last year’s ‘norm’ of stages 1 and 2.

South Africans should expect load shedding to get worse in 2023, says Intellidex analysts Peter Attard Montalto, who forecasts stage 7 load shedding – or higher – by the middle of the year.

Estimations are that the prolonged Stage 6 load shedding wipes out approximately R4 billion from GDP each day, far surpassing the economic impact of Covid-19. Some economists estimate that the SA economy would be 8% to 10% larger if Eskom had not failed to electrify the country.

Department of Social Development

In a presentation to parliament this week, the department said that about 31% of the South African population relies on social grants – which include everything from disability to childcare.

However, there are approximately 10 million beneficiaries who depend on the grant. This means that almost 30 million of South Africa’s 60-million citizens are now welfare recipients.


Confidence in South Africa’s future has fallen after more than a decade when average economic growth failed to match the increase in population, meaning the country’s citizens have been getting poorer. The country has been afflicted by corruption scandals in recent years and regular power outages since 2014. More than 350 people died in a spate of looting and arson in July 2021. This day of looting came with a hefty R50 billion price tag. The violence reflects an economy that has been “stagnant for more than a decade,” said Gerbrandt van Heerden, an analyst at the Johannesburg-based think tank. “A lot of the unrest that South Africa has experienced this year and before are connected to a failing state.”

Data shows there is a strong correlation between economic growth and social stability and rioting and looting could become more prevalent in the next few years unless the authorities are serious about implementing reforms. Small business will likely suffer the most from frequent unrest and higher crime levels will weigh on South Africa’s ability to attract investment, he said.

The government has formally adopted five blueprints to boost gross domestic product and job creation since the ANC won the nation’s first all-race elections 27 years ago. However, most of the policies have been stalled by powerful vested interests and policy paralysis, which left Africa’s most-industrialised economy stuck in its longest downward cycle since World War II even before the coronavirus pandemic hit output.

A recent study shows that 53% of university graduates and 43% of citizens earning more than R20,000 a month may leave the country. If an increasing number of South Africa’s richest people leave the country, the number of those paying tax, which supports welfare payments to almost half of South Africans and other government services, will plunge.

Our Tips: Budget, Get rid of debt, Save and Inspect

Budget– know exactly where all your money goes, where you can adjust to save even small amounts, and how to effectively save and leave enough money for unexpected expenses and emergencies.

Get rid of debt– whether it’s an inheritance, a bonus, investment returns or winnings from a competition, any extra income should be put towards paying off debt.

Save- set aside a certain amount for savings and investments. This money can be put aside for a big goal such as a holiday or education, or it can used for a rainy day or to take care of expenses due to loss of income.

Inspect– re-evaluate their fixed monthly expenses on memberships, subscriptions, and insurance. There may be memberships and subscriptions that are being paid for but are not in use now.

Stay Savvy,


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