Exploring factors influencing economic growth in the South African economy

Abstract

This research aims to investigate the determinants of economic growth in South Africa using quarterly data spanning from 1967 to Q2 2023. The Autoregressive Distributed Lag (ARDL) model is employed to analyze variables such as gross fixed capital formation, exports, GDP, consumption, and employment across various sectors. The analysis reveals that factors like investment, exports, household consumption, and employment in the private sector play substantial roles in promoting economic growth. Conversely, government spending and public sector employment appear to have limited effects. These findings underscore the vital role of the private sector in achieving sustainable economic growth and suggest that government policies should focus on strengthening private sector activities to stimulate economic development. This study enriches the ongoing debate about the importance of the private sector in driving economic growth, providing new insights into its pivotal role.