The global economy demonstrated firm growth in 2022, notwithstanding strained recoveries among some nations still shedding the yoke of the pandemic. Further, economic growth across sub-Saharan Africa was supported by various factors including the recovery in global trade, elevated commodity prices and aid from international organisations and donors. The tourism sector is also healthier, particularly in countries such as Kenya and Botswana.
In South Africa, economic performance was underpinned by household spending, especially from high-income earners, and we expect continued strength due to the lagged recovery in employment, ongoing pro-poor fiscal support, and above-inflation wage growth. However, South Africans will have to contend with high food and fuel prices and increased electricity tariffs. Also, globally, central banks have a responsibility to tackle rising inflation which has largely been the result of tight supply chains in parts of the economy. Many emerging market economies have similarly raised interest rates to contain inflation risks.
Overall, we believe that Africa will maintain above average growth rates over the medium term, and we will continue to provide insights to help our clients navigate the continent’s multitude of opportunities and risks.
Chief Economist, Standard Bank Group