Rebasing GDP data unlikely to change SA economic outlook

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By Prinesha Naidoo

(Bloomberg) – South Africa’s statistics agency will overhaul economic output data and revise the weights of the various sectors that are used to calculate gross domestic product.

The base year for measuring GDP will be updated to 2015 from 2010 in data to be released in September, the Pretoria-based Statistics South Africa said in an emailed response to questions. That means GDP figures from the second quarter of 2020 onwards will be calculated using the new reference year and revised weights.

Statistics South Africa usually rebases GDP data every five years and the last overhaul was in 2014. The adjustment is unlikely to bring material changes to recent growth outcomes in an economy that’s stuck in the longest downward cycle since 1945 and strained by political and policy instability, poor business confidence and regular electricity cuts. GDP growth likely slowed to 0.4% in 2019, according to the central bank.

South Africa’s GDP was R4.9trn ($338bn) in 2018, according to the statistics agency’s data. While the National Treasury and central bank sees it expanding by 1.2% this year, international lenders such as the World Bank and International Monetary Fund forecast economic growth of below 1%.

While the rebasing of GDP data is a regular occurrence, it’s difficult to say how it will affect historic data and forecasting, said Miyelani Maluleke, a senior economist at Absa Bank.“Our approach to that is to always wait and see what the new state of national account numbers look like and then I think we’ll recalibrate our models,” he said. The lender cut its economic growth forecast for 2020 to 0.9% from 1.4%.

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