Explainer: What forces will shape South Africa’s economy in 2023?

Last October, the International Monetary Fund warned in its World Economic Outlook that the worst is yet to come and that, for many people, 2023 will feel like a recession.

Shaping this rather dire outlook was a number of global headwinds, which stayed with us for much of 2022: Russia’s war on Ukraine, volatile energy prices, sky-high inflation, the ratcheting up of interest rates and China’s slowdown.

For a small, open economy like South Africa’s, these ructions in the global economy were bound to take their toll. And although a commodity boom ended up being a boon for the country’s mining companies — and for the public purse — the pinch on consumers was a threat to growth.

As we look ahead into 2023, a number of forces are set to shape South Africa’s economy, the biggest being the country’s energy predicament. Then there is the cost of living crisis, which in many ways defined 2022 and could continue to temper economic growth.