Businesses and households in South Africa held on to more cash in the third quarter, when power outages reached an all-time high.
While the increase in corporate savings is largely due to changes in seasonally adjusted operating surpluses and tax payments, it comes as rolling blackouts occurred for almost half of the time in the third quarter. Private companies have been wary of committing large sums of money to domestic projects due to the nation’s electricity rationing, slow pace of reforms, high levels of crime, state graft and instability that last year culminated in the worst civil unrest since the end of apartheid.
While South Africa averted a technical recession in the third quarter, it remains stuck in its longest downward cycle since World War II, with the economy entering its 109th month of a weakening cycle in December, according to central bank data.