The Experian Business Debt Index , which reflects the relative ability for business to pay their outstanding suppliers/creditors – in other words, the overall health of businesses in the economy – unsurprisingly declined sharply to a reading of 0,996 in Q4 2022 from 1,591 in Q3.
“First and foremost, the level of electricity load shedding intensified sharply in Q4 with the predominant level of load shedding moving to Stage 4 in Q4 from Stage 2 in Q3,” says Jaco van Jaarsveldt, head of commercial strategy and innovation at Experian Africa. “This was disruptive to domestic economic activity across a broad front and manifested in the deterioration in quarter-on-quarter GDP growth from 1,8% in Q3 to -1,3% in Q4.
Higher interest rates and high inflation derived from sharp increases in food and fuel prices – partially linked to the war in Ukraine – as well as supply-side pressures resulting from disruptions to supply chains in the wake of Covid-19 restrictions in the previous two years, were also a partial contributor towards the reduction in domestic economic growth.
The other sector which declined steeply was the agricultural sector on the back of a dramatic slowdown in the sector’s growth with QoQ growth plunging from an extremely high 30,5% in Q3 to a negative -3,3% in Q4. The plunge was mainly driven by energy-related challenges as temperature regulation throughout the supply chain has become increasingly challenging as a result of the continued load shedding.