JOHANNEBSURG - The South African economy may be bigger, but it does not mean that we are richer as a country.
According to the South African Reserve Bank Governor, Lesetja Kganyago, it simply means that we have a better hindsight understanding of how the economy looks.
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StatsSA has done a recounting exercise looking at South Africa's economy. The exercise revealed that the country's economy is 5 percent larger than previously stated.
It has revised benchmarks for GDP use to calculate the entire output of the economy. It has also changed the base year used for comparisons from 2015 to 2022.
The exercise takes place every five years to get hindsight insight of what might have been missed in understanding how the country's economy is growing.
"The interesting thing is that this re-estimation also changes how the country is perceived as some of the measures are done relative to the size of the economy," says Kganyango.
He says that by the Reserve Bank's assessment back in September, they expect the economy to grow 1.2 percent this year. Meanwhile, the International Monetary Fund estimates South Africa will grow by 1 percent.
"South Africa has turned a corner and had it not been for the war, the economy was actually accelerating," he says.
"The war found that South Africa has built defences that were able to cushion the economy," he adds.
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South Africa has a lower inflation target and its debt has stabilised and has now begun to decline. The premium asked by foreigners to invest in the country has declined and the Rand has performed better in the aftermath of the shock, thanks to the buffers that it built.
Kganyago says had it not been for the buffers, fuel prices would have been higher. If it had not been for the buffers the Minister of Finance would not have been able to give South Africans relief from high fuel prices.
"As individuals we also have to adjust, I know that South Africans are experiencing pain from this," he says.
Despite this, South Africans are resilient and are finding work arounds. Kganyago applauds the Department of Transport for opening additional Prasa routes.
As many international countries have public transport to buffer their traveling costs. He says hopefully, the opening of the corridors in South Africa will go a long way to assisting South Africa's commuters.