Macroeconomic Trends in South Africa REPORT - September 2023

Despite global economic instability and the persistent electricity crisis, the South African economy was able to beat the odds and expand for two consecutive quarters since the beginning of 2023. The economy is now larger than it was before the pandemic with the 2 million jobs that were lost largely recovered. Although modest, the slow growth expansion has helped bring unemployment rates down in the second quarter of the year. However,

unemployment remains extremely high and a major source of policy concern as South Africa enters a critical electoral period. Annual inflation, in turn, had a hiccup in August 2023, but this has not been strong enough for the South African Reserve Bank (SARB) to increase the repurchase rate in its latest Monetary Policy Committee meeting, on 21 September. The decision was to keep interest rates constant while maintaining caution in face of potential shocks, both external and of domestic nature.