A slight yet positive increase in South Africa’s economic growth is anticipated over the next few years, but US President Donald Trump might throw a spanner in the works.<\/p>\n\n\n\n
According to a press release, Doctor Clement Moyo, economist at Ntiyiso Consulting, predicts that the US won\u2019t renew the African Growth and Opportunity Act (AGOA) after it lapses in September, which will have a detrimental impact on vehicle exports.<\/p>\n\n\n\n
\u201cSouth Africa exports vehicles worth R1.9 billion (22%) to the US, creating 86 000 direct jobs and 125 000 indirect jobs in other industries thanks to AGOA,\u201d Moyo said.<\/p>\n\n\n\n
He presented an economic forecast on the country and specifically the automotive and retail motor industries to MIBCO, the Motor Industry Bargaining Council, at the pre-bargaining conference held in Kempton Park on March 12.<\/p>\n\n\n\n
\u201cThe global economy has been suffering since the Covid-19 pandemic, with limited economic growth and a sharp rise in inflation.<\/p>\n\n\n\n
In 2024, the world\u2019s economic growth was 2.7%. It is predicted that Trump\u2019s sweeping 25% tariffs on all metal imports to the US will have a massive impact.”<\/p>\n\n\n\n
Moyo added, \u201cSouth Africa\u2019s economic growth was a mere 0.6% in 2024. The forecasted economic growth for 2025 and 2026 is 1.8% and 2% in 2027, and 2.1% in 2028. This means that South Africa\u2019s Gross Domestic Product (GDP) is too low to achieve any of the country\u2019s socio-economic growth strategies to help alleviate unemployment.\u201d<\/p>\n\n\n\n
According to him, Trump\u2019s tariffs are expected to result in a rise in inflation from its current 3.2% to 4.5% in the fourth quarter of this year. \u201cInflation is a killer to economic growth.\u201d<\/p>\n\n\n\n
The automotive sector contributed 5.3% to GDP in 2023, of which the retail motor industry contributed 2.1%. Vehicles are considered luxury goods, hence sales are heavily influenced by inflation and high interest rates.<\/p>\n\n\n\n
Moyo explained that the 900 000 vehicles sold in 2024 generated R362 million in revenue, with an additional R123 million in components sold. The industry employs 304 723 people, 8% of whom are foreigners with scarce skills.<\/p>\n\n\n\n
The release added that this economic forecast presentation will be shared with all parties in MIBCO before the first round of the wage and substantive negotiations starts on April 10.<\/p>\n\n\n\n
MISA is set to submit the demands of its members on April 1.<\/p>\n","protected":false},"excerpt":{"rendered":"
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