Macroeconomic Trends in South Africa REPORT - May 2023

In a context of still very volatile external environment, uncertainties surrounding the domestic economy and elevated inflation expectations, on 23 May 2023 the South African Reserve Bank (SARB) increased the benchmark rate once again, to 8.25 per cent per year. At the same time, SARB revised projected annual GDP growth upward from 0.2 to 0.3 per cent for the year 2023. SARB also expects the rand to further depreciate following a decline observed in the past several months, as well as a progressively larger current account deficit, to reach 2.5 per cent in 2023, and 3.1 and 3.6 per cent in 2024 and 2025, respectively. Despite expectations that the economy may have contracted in the first quarter of 2023 (mainly because of loadshedding), employment in South Africa expanded in the quarter. However, the unemployment rate, which measures the share of unemployed people in the total labour force, increased by 0.2 percentage points to 32.9 per cent.