GDP overshoots expectations at 0.6% q/q in the second quarter
6 Sep, 2023

Herman van Papendorp, Head of Investment Research & Asset Allocation, Tshiamo Masike, Economic Analyst at Momentum Investments and Sanisha Packirisamy, Economist at Momentum Investments


Momentum Investments have released their report based on GDP overshoots expectations at 0.6% q/q in the second quarter prepared by the Momentum Investments Macro Research Team.


Below is a summary of highlights from the team, as well as a downloadable PDF of the Research Paper and Stats SA media release and an audio podcast with commentary from Sanisha Packirisamy, Economist at Momentum Investments.




  • According to Statistics South Africa (Stats SA), seasonally adjusted (sa) real gross domestic product (GDP) rose by 0.6% quarter-on-quarter (q/q) in the second quarter of 2023. This represented the second consecutive quarterly uptick in economic growth from negative 1.1% q/q recorded in December 2022.


  • Growth beat the Reuters median consensus expectation of 0.1% q/q by a large margin.


  • Year-to-date (January to June 2023) economic growth was 0.9% higher than the first half of 2022.


  • The overall economy has consistently recorded activity slightly above pre-pandemic levels (2019 average) since the third quarter of 2022 and the second quarter GDP print maintained this trend. Robust output in agriculture, finance and personal services has been enough to overshadow the below pandemic output in mining, manufacturing, utilities, construction and trade. However, mining and manufacturing performed reasonably well in the second quarter and left overall activity much closer to pre-pandemic levels.


  • Mining and manufacturing production benefited from loadshedding not exceeding stage 6 as previously warned of in the months leading up to winter. These two industries are demonstrating increasing resilience.


  • On the demand side, the only component registering below pre-pandemic activity is fixed investment. The sharp growth in fixed investment in the second quarter did, however, bring fixed investment closer to the 2019 average.


  • According to historical trends of Eskom’s Energy Availability Factor (EAF), the Council for Scientific and Industrial Research (CSIR) flags the risk of higher stages of loadshedding (within the maximum stage 6) in the coming months. Stage 6 was announced on 4 September for the first time since 13 July 2023.


  • Merchandise trade statistics published by the SA Revenue Services (SARS) recorded a trade surplus of R8.07 billion in the second quarter as the value of exports outpaced that of imports. However, according to Stats SA, the volume of imports grew faster than exports which resulted in imports detracting the most from growth.


  • On account of less loadshedding experienced during winter, we revised our growth forecast for 2023 up to 0.2% from 0%. However, the better-than-expected growth outcome for the second quarter is likely to lift this estimate closer to 0.5%. The International Monetary Fund’s (IMF) and the SA Reserve Bank’s (SARB) growth estimates of 0.3% and 0.4%, respectively, are likely also subject to an upward revision following the positive growth surprise for the second quarter. That said, loadshedding still remains a major risk to the growth outlook.


  • The SARB’s composite leading business cycle indicator decreased by 3.9% q/q in the second quarter of 2023 which suggests a weak growth trajectory in the very near-term.



Listen to the audio file:


Download the Research Paper and Stats SA media release – Click Below:








@Herman van Papendorp, Momentum Investments
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@Tshiamo Masike, Momentum Investments
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@Sanisha Packirisamy, Momentum Investments
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