World Economy

Pretoria Is South Africa’s Fastest Growing Metro Economy

Pretoria Is South Africa’s Fastest Growing Metro EconomyPretoria Is South Africa’s Fastest Growing Metro Economy

The recent announcement from the Brookings Institute, that Pretoria is now the fastest-growing South African metropolitan economy, appears to suggest that future growth prospects for the national economy seem, at last, to be more promising.

It is true that the economic growth of Pretoria is undeniably a step in the right direction for the growth of the broader economy, News24 reported.

It is equally evident, however, that persistent structural barriers and political uncertainty are challenging factors contributing towards continuing the low level of economic growth at the national level.

Nonetheless, the change in political leadership, with the election of Cyril Ramaphosa, first as leader of the African National Congress then as president, could aid further economic growth of metropolitan economies, like Pretoria. If that occurs, it could signify the potential for improved growth across the South African economy as a whole.

Gauteng Province, in which Pretoria is situated, is lauded as the “economic engine” of South Africa. Despite that, however, the positive economic growth of the province as a whole has previously fallen short of expectations.

The result has been high income inequality, significant levels of unemployment, declining global competitiveness and a general slowing of productivity growth.

Economic growth was further significantly hindered when the country fell into recession during the first quarter of 2017. Gross domestic product shrank by 0.7%, which negatively affected industries such as trade and manufacturing. Those industries, along with mining and agriculture, are vital components of the South African economy.

The Brookings Global Metro Monitor June 2018 report found that Pretoria had the highest regional growth in employment, at 7.6%, and a robust 3.5% GDP per capita growth.

Compared to earlier in the year, when the national economy contracted by 2.2%, Pretoria’s economic growth indicates that there is potential for a more positive outlook in the future. National economic growth has been predicted to reach 1.6% in 2018 and 2.0% in 2019; notably higher than in preceding years.

Existing structural barriers to economic growth, such as the widespread infrastructure deficit, income inequality, skills shortages, unemployment and poverty, along with uncertainties surrounding the general direction of economic policy, continue to pose challenges to the future economic prospects of the country as a whole.

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