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Reflections on loadshedding and potential GDP

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  • Theo Janse van Rensburg
  • Kgotso Morema

Abstract

This economic note investigates the slowdown in South African growth since the global financial crisis. It finds that domestic growth (both actual and potential) has been on a declining trend largely due to structural constraints, which over the last two years have been exacerbated by load-shedding. SARB models estimate the impact of load-shedding at between -0.7 and -3.2 percentage points, while other institutions' estimated impacts range between -0.4 and -4.2 percentage points. In our view, load-shedding will likely continue for longer as Eskom embarks on major repairs, new capital investment and maintenance projects. To prevent further growth slippage, it is crucial that there is efficient implementation of energy reforms as well as private sector participation and investment.

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  • Theo Janse van Rensburg & Kgotso Morema, 2023. "Reflections on loadshedding and potential GDP," Occasional Bulletin of Economic Notes 11048, South African Reserve Bank.
    • Handle: RePEc:rbz:oboens:11048
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    1. Dani Rodrik, 2008. "Understanding South Africa's economic puzzles," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 769-797, October.
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