Latest news with #StatisticsSouthAfrica
Business Insider
21 hours ago
- Business
- Business Insider
South Africa faces economic strain as 482 businesses close in four months
South Africa recorded 109 business liquidations in April 2025, bringing the total number of closures this year to 482 during the first four months in 2025, according to Statistics South Africa (Stats SA). South Africa experienced 109 business liquidations in April 2025, totaling 482 closures during the year's first four months. Voluntary liquidations in South Africa increased by 25.7% year-on-year, whereas compulsory liquidations initiated by creditors declined by 29.4%. The global trade tensions, including U.S. tariffs and domestic economic uncertainties, exacerbate the hardships for South African businesses. South Africa is facing a continued rise in business closures, with over 100 companies liquidated in April 2024 marking a 13.2% increase compared to the same period last year, highlighting ongoing challenges for the country's business environment. The data shows that voluntary liquidations where business owners decide to close their companies increased by 25.7% year-on-year. Conversely, compulsory liquidations initiated by creditors due to unpaid debts declined by 29.4%. This shift suggests that more entrepreneurs are choosing to close down operations proactively amid economic difficulties. Businesses across the country are struggling with a combination of financial and operational pressures. High interest rates are making borrowing more expensive, while weak consumer demand has reduced revenue streams. These challenges make it difficult for many businesses to remain viable. Rising operational costs and energy insecurity Energy supply issues, particularly frequent power outages known as load shedding, continue to disrupt business operations. Companies are forced to use expensive alternatives like generators, which drive up costs. In addition, logistical hurdles and increasing transport expenses further strain resources, especially for small and medium-sized enterprises. These compounding factors have contributed to the increased wave of liquidations. The Small Business Institute has noted that the data reflects a worsening business climate, where many companies cannot sustain operations under current economic pressures. The Trump factor? BusinessTech attributes South Africa's increasingly difficult business climate to mounting external and internal pressures, including the launch of U.S. President Donald Trump's global tariff war and growing tensions within the Government of National Unity (GNU) over the 2025 budget. Trump imposed a sweeping 10% global tariff on 5 April, followed by a harsher set of 'reciprocal' tariffs targeting select countries including South Africa. Branded the 'Liberation Day' tariff, the latter measure was temporarily paused for 90 days. Washington's trade war with South Africa, following the nation's land reform laws that allegedly targeted white farmers, further strained relations between the two countries. Trump's aggressive trade posture triggered significant global uncertainty, disrupting markets and prompting many South African businesses to halt investment and development plans as they adopted a cautious, wait-and-see approach. As South Africa moves through 2025, the growing number of business liquidations serves as a stark reminder of the need for stronger economic interventions to protect small and medium-sized enterprises, the backbone of the economy, and to foster recovery and growth.
Eyewitness News
3 days ago
- Business
- Eyewitness News
Human rights organisation, COSATU and economists debate future of social grants
South Africa's economy is not creating enough jobs, so what happens to the millions of people who currently rely on social grants? This was the question raised by activists, economists and labour leaders at a panel discussion hosted by the Black Sash in Cape Town on Wednesday. The event was part of the organisation's 70th anniversary celebrations, and looked at the impact of removing social assistance in a country with high youth unemployment, food insecurity and growing inequality. The General Household Survey released by Statistics South Africa (StatsSA) on Tuesday, shows that the proportion of people receiving social grants grew from about 13% in 2003 to 31% in 2019 and surged to 40% in 2024 'due to the introduction of the special Covid-19 Social Relief of Distress (SRD) grant'. Rachel Bukasa, Executive Director of Black Sash, said social grants are not a luxury, but a necessary response to high unemployment and poverty. 'Grants are an important stop-gap to the poverty and unemployment that exists. One of the biggest misconceptions when we talk about grants is that we don't want people to work. When we call for grants, it's in the absence of the jobs that the government has promised year after year.' She said while job creation remains the goal, the economy doesn't offer enough work for those who need it. Bukasa dismissed claims that grants breed dependency, saying they are a vital safety net while the government works to improve the job market. COSATU's Tony Ehrenreich agreed with Bukasa. He said the alternative to social support from the state is people falling into hunger and desperation. 'Grants are only a requirement when the market has failed. If the market is perfect there will be no need for grants, but the market is not perfect so we need to take care of people in the interim … It's not a question of jobs or grants. It's both,' Ehrenreich said. StatsSA reported that the official unemployment rate stood at about 33% in the first quarter of 2025. The expanded unemployment rate, which includes discouraged job seekers, is 43%. Ehrenreich said these statistics show the current economic direction is not working. 'We can say the system has failed if we look at the unemployment rate and deepening inequality … Must poor people pay for the failure of the rich and the public policymakers who drive around in their fancy cars? That can't be the response.' But political economist Phumlani Majozi said the current grant system is putting too much pressure on the country's fiscus. 'South Africans agree that the best way to move forward as a society is for people to have jobs … In our budget, the social grant expenditure is massive. 65% of our expenditure goes towards social grants, subsidised housing etc … Fiscally, it's not something that is manageable.' He criticised the lack of government vision. 'Where is the plan from the president and his cabinet to say by a certain year these are the targets … It doesn't seem like Enoch Godongwana has a plan.' Majozi said the system discouraged reform. 'There will be no incentive for government to change and pursue policies to encourage economic growth if our first argument is that we need social grants.' To which Bukasa responded that social security is a right, not a favour. 'Social assistance is protected by the Constitution. So we need to do away with the notion that it's a favour the government is doing … The fact that we have high needs for social protection right now is a reflection of governments inability to deliver on job creation.' This article first appeared on GroundUp. Read the original article here.
The Citizen
4 days ago
- Business
- The Citizen
Producer Price Index remains unchanged, but an increase is coming
'Altogether, we expect PPI to average around 3% in 2025'. Producer Price Index (PPI) in April remains unchanged at 0.5% from March 2025. PPI measures the average change in prices of goods and services produced by manufacturers and producers. It tracks inflation at the production level, showing how costs are changing for goods before they reach consumers. Statistics South Africa (Stats SA) released the Index on Thursday, showing PPI increased by 0.5% month-on-month. However, economists believe that producer inflation is likely to rise moderately in the coming months. Professor Waldo Krugell, an economist at the Faculty of Economic and Management Sciences at the North-West University (NWU), this week told The Citizen the annual 0.5% PPI is very low. However, the month-to-month is on the high side. ALSO READ: Small fuel price decrease no help for consumers in looming rough ride Positive contributor in the PPI Stats SA stated that the main positive contributors to the headline PPI annual and monthly inflation rate were food products, beverages, and tobacco products. Annually, the products increased by 4.7%, contributing 1.4%, while monthly, they increased by 0.9%, contributing 0.3%. The index shows that the annual percentage change in the PPI for intermediate manufactured goods was 8.5% in April 2025, compared with 7.4% in March 2025. The index increased by 2.4% month-on-month. The main contributors to the annual rate were basic and fabricated metals and chemicals, as well as rubber and plastic products. The products increased by 4.2%, contributing 1.2%. How does the PPI affect consumers? If producers face higher costs, these costs might be passed on to consumers through higher prices on goods and services. Increasing PPI can also mean an increase in future for consumer prices. Nedbank economists predict PPI will moderately increase in the coming months. 'The low base established in the second half of last year will amplify the upward trend, particularly on food. Local food prices will also be affected by higher global food prices, a weaker rand and potential disruptions to global supply chains due to the unfolding trade war.' ALSO READ: Godongwana cuts zero-rated food basket in Budget 3.0 Electricity and water The statistics show that the annual percentage change in the PPI for electricity and water was 11.2% in April 2025, compared with 10.0% in March 2025. 'The index increased by 6.4% month-on-month. The contributors to the annual and monthly rates were electricity and water.' Greater concern for food Nedbank also said the outbreak of animal diseases is a concern for livestock. Economists expect global oil prices to remain relatively subdued in 2025, owing to balanced supply and demand dynamics. Beyond food and fuel, upward pressure will also come from steep electricity tariffs. Renewed rand weakness poses the most significant upside risks to the outlook. 'The rand remains vulnerable to fragile global risk sentiment, which could shift dramatically in response to any escalation in the global trade war, changes in US monetary policy, or a prolonged period of acute policy and geopolitical uncertainty.' 'Altogether, we expect PPI to average around 3% in 2025.' NOW READ: Budget 3.0: Fuel levy replaced VAT hike, but is it the better option?
Reuters
4 days ago
- Business
- Reuters
South Africa producer inflation unchanged at 0.5% y/y in April
JOHANNESBURG, May 29 (Reuters) - South Africa's producer inflation was at 0.5% year on year in April, unchanged from March, statistics agency data showed on Thursday. The Producer Price Index increased 0.5% month on month in April, Statistics South Africa said.
Reuters
4 days ago
- Business
- Reuters
South African rand steady before interest rate decision, PPI data
JOHANNESBURG, May 29 (Reuters) - The South African rand was steady in early trade on Thursday, ahead of a much-anticipated interest rate decision by the South African Reserve Bank (SARB) and monthly producer inflation figures. At 0702 GMT, the rand traded at 17.92 against the dollar , little changed from Wednesday's closing level. Statistics South Africa will publish April domestic producer inflation figures at 0930 GMT, and Nedbank economists said in a research note that they expect it to have remained steady at 0.5%. Investor attention will be pinned on an interest rate decision by the central bank expected around 1300 GMT. The majority of economists polled by Reuters expect the bank to trim its main lending rate (ZAREPO=ECI), opens new tab by 25 basis points, though a significant minority think the rate could be left unchanged. Inflation (ZACPIY=ECI), opens new tab is currently below the central bank's target range, though policymakers have stressed risks from U.S. President Donald Trump's trade war and domestic politics. "The upside risks to the outlook have subsided since the March meeting," the Nedbank note said. South Africa's benchmark 2030 government bond was also little changed in early deals, with the yield at 8.78%.
