Home Business Eskom power cuts to hit South Africa Q1 GDP growth -Goldman Sachs

Eskom power cuts to hit South Africa Q1 GDP growth -Goldman Sachs


London – Severe planned power cuts – termed “load-shedding” – at South Africa’s state-run utility Eskom are expected to shave 0.3 percentage points off first-quarter GDP growth, Goldman Sachs said on Thursday.

Goldman said in London that should the power cuts persist, it could subtract higher percentage off the growth.

“If the current intensity of load-shedding were to persist in 2019, it could subtract up to 0.9 percentage points from annual growth,” Goldman analysts wrote in a note to clients.

Soth Africa’s economy has suffered from some of the worst power cuts in several years and a major challenge for President Cyril Ramaphosa.

The cuts are coming two months before an election at which he will try to reverse a decline in voter support for the African National Congress (ANC).

Eskom supplies more than 90 per cent of the power in South Africa but has suffered repeated faults at its coal-fired power stations, along with low water levels at hydroelectric plants and diesel shortages.

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