Page 15 - Provincial Treasury Estimates.pdf

Executive Summary

Economic Outlook and Budget Strategy

The current economic outlook remains uncertain, characterized by an uneven recovery.
Progress in addressing some of the long-standing domestic structural challenges remains

mixed, with electricity supply and domestic transport network industries recently coming under
severe operational constraints.

Global economic conditions remain under pressure mainly due to the Russia-Ukraine war and
the resultant upward pressures on food and energy prices. Rising input costs and food prices

continue to be significant drivers of global inflation and exerting upward pressures on
borrowing costs. However, the recent re-opening of the Chinese economy is expected to
provide some reprieve by boosting global demand and global trade volumes. The International

Monetary Fund (IMF) expects global growth to decline from an estimated 3.4 per cent in 2022
to 2.9 percent in 2023.

Based on recent reports by Statistics South Africa, the South African economy is estimated to
have grown by 2 per cent in 2022, following a severe decline of –1.3 per cent in quarter 4 of
2022. The quarter 4 decline has been due mainly to persistent load shedding.

For the near term National Treasury has revised down the country’s growth projections to 0.9

per cent for 2023, and further projected to average 1.4 per cent from 2023 to 2025.

For the provincial economy which remains closely tied to the national economy, growth

estimated to be 1.8 per cent in 2022. For 2023 and 2024, provincial economic growth is
projected to slow down to 0.7 and 1.4 per cent, respectively. With such subdued growth levels

the developmental outcomes espoused by the NDP and PDP will remain largely unrealized.
The unemployment rate in the province currently estimated at 42.1 per cent.

In terms of health and education outcomes including the delivery of basic services at local
government level there has been significant progress in the province. Learner attainment has
improving, on measures of universal health coverage health services have improved.

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