GDP growth - A chart that reads "South Africa's economic recovery loses momentum as structural vulnerabilities pile up"

MNCs should raise brand awareness to protect market share

Firms selling to resilient industries and customer segments, such as financial services and high-income households, should review targets to reflect relatively upbeat opportunities, and ensure product portfolios provide sufficient optionality for customers. Conversely, MNCs exposed to fragile industries and customer segments, including agriculture, manufacturing, mining, and the public sector, should consider raising brand awareness, for example, by increasing marketing spending or by running promotions. Providing value-added services and positioning products as offering cost-saving solutions will also help protect market share. Meanwhile, all MNCs should assess if customer spending power—including in the otherwise resilient service industries—will be vulnerable to a combination of rising credit costs and accelerating inflation.


  • GDP growth slowed to 0.2% YOY in Q2 2022, the worst performance since Q1 2021. The slowdown was caused by sharp contractions in primary and secondary industries, notably agriculture (-20.9% YOY), mining (-9.6% YOY), construction (-5.7% YOY), and manufacturing (-3.8% YOY). 
  • However, resilient growth continued in tertiary industries, including transport and ICT (+6.7% YOY), finance and real estate (+4.7% YOY), and personal services, which includes healthcare (+3.7% YOY).
  • Meanwhile, on September 22, the South African Reserve Bank’s monetary policy committee raised its benchmark lending rate by 75 basis points to 6.25% to tame inflation and stabilize the rand. This is the sixth consecutive hike since late 2021, representing a sharp increase in borrowing costs from the record lows that had endured much of the pandemic.

Our View

The GDP growth outlook remains muted (1.8% YOY in 2022 and 1.7% YOY in 2023) because of power shortages, rising interest rates, chronic fiscal strains, and rising investor anxiety ahead of the April 2024 general election. However, service industries will continue to outperform the overall economy; private sector healthcare will be driven by backlogs in demand and the expansion of private medical aid (insurance) offerings; financial services will benefit from robust regulation, strong bank sector capitalization, and the accelerated expansion in digital offerings that began during the pandemic; and retail and hospitality will gradually regain ground lost since the start of the pandemic, partly thanks to strong salary growth among high-income households.

At FrontierView, our mission is to help our clients grow and win in their most important markets. We are excited to share that FiscalNote, a leading technology provider of global policy and market intelligence has acquired FrontierView. We will continue to cover issues and topics driving growth in your business, while fully leveraging FiscalNote’s portfolio within the global risk, ESG, and geopolitical advisory product suite.

Subscribe to our weekly newsletter The Lens published by our Global Economics and Scenarios team which highlights high-impact developments and trends for business professionals. For full access to our offerings, start your free trial today and download our complimentary mobile app, available on iOS and Android.