<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
SIMON BROWN: I\u2019m chatting with Helenya Fourie, senior economist at the Bureau for Economic Research. Helenya, I appreciate the time.<\/p>\n
GDP, a measure of economic activity, feels like it\u2019s been around forever. It sort of helps us understand economic strength if you will. But in a recent note you wrote \u2018not the best measure\u2019.<\/p>\n
HELENYA FOURIE: Well, Simon, I think the point we\u2019re trying to make is that GDP remains indispensable. It allows South Africa to benchmark our performance and our size against countries elsewhere in the world. So we\u2019re not saying that it needs to be replaced. What we\u2019re saying is that the world is changing to the extent that it might be necessary to start thinking about complements to GDP.<\/p>\n
Read\/Listen:
Unpacking the primary surplus versus GDP growth for SA
Conflict and the bottom line: What GDP doesn\u2019t tell you about Africa\u2019s economies
Global economy resilience helpful to SA\u2019s economy<\/p>\n
The goal of GDP was never to give an indication of welfare, so there\u2019s a shortcoming in that sense. It doesn\u2019t necessarily measure household production or the distribution of income, but more recently, because our economies are becoming increasingly services-oriented and knowledge-based, those things are more difficult to measure than what GDP typically captures.<\/p>\n
So we\u2019re saying let\u2019s start thinking creatively about alternatives.<\/p>\n
SIMON BROWN: And a couple of key points there. We\u2019re not saying do away with GDP. It serves the purpose. It\u2019s great. We love it. And this isn\u2019t a uniquely South African issue either. Obviously we are talking about South Africa, but the challenges are going to be more or less the same the world over.<\/p>\n
HELENYA FOURIE: Definitely. What I do think is unique to South Africa is that we are at a critical juncture. Many people would say we\u2019re at a crossroads. We need to get a clearer signal of what\u2019s truly going on in the economy because I think people are sitting on the edges of their seats, wanting to act.<\/p>\n
They want to know in which direction South Africa\u2019s economy is going to go. And a measure that\u2019s only released quarterly, often with a lag, doesn\u2019t necessarily give you a high-frequency, granular view of what\u2019s going on on the ground and makes it more difficult to make decisions.<\/p>\n
Read\/Listen: SA\u2019s economy grew 1.1% in 2025<\/p>\n
SIMON BROWN: Yes, The Q4 data came out only last week. We were already in March. You do have solutions. This isn\u2019t just problems, and none of this is really sort of rocket science \u2013 not in any way to take away from the note you wrote. But we get satellite data. I know investors use it. We have a ton of data from mobile phones, from payment flows. There is other stuff we can pull in that we could use.<\/p>\n
HELENYA FOURIE: For sure. I think the world and technology is changing to such an extent that it\u2019s really becoming much easier. AI allows us to analyse and generate data in a much quicker way than what\u2019s possible in the past. I think the problem is governance, essentially, and a bit of market failure \u2013 if I can introduce some economic jargon.<\/p>\n
The people who are proprietors of this data often are private firms, banks, telecoms companies \u2013 and for them, themselves, there isn\u2019t necessarily a direct benefit in sharing it.<\/p>\n
Of course, there are competition concerns and trust issues, but if they were to be an independent body that could sort of be the custodian of this type of information and help make sense of it, I think it could actually add a lot of value to decision makers.<\/p>\n
Read: What AI can do (and what it can\u2019t)<\/p>\n
SIMON BROWN: And the idea would be \u2013 I follow the Atlanta Fed, and they do something they call GDP now, which is very much what you\u2019re sort of suggesting. They\u2019re putting out data all the time, as they get data. This would give us real-time understandings of what\u2019s happening on the ground and enable us as a country, as an economy, to respond quicker.<\/p>\n
HELENYA FOURIE: Exactly. I think we shouldn\u2019t underestimate or shouldn\u2019t discredit what the Sarb is also doing. They have composite indicators that they release more frequently. But the point is I think we can go further.<\/p>\n
We need to think more creatively about what is becoming available out there, especially in the digital realm.<\/p>\n
It\u2019s often hard to measure digital services. Many of these digital services are free, and yet they add immense value.<\/p>\n
With AI being massively productivity-enhancing, the cost of sort of producing services is falling, which might actually then reflect in GDP as negative, whereas a lot of value is still being added. So there are a lot of things happening out there, but we need to make sure that we are at the cusp of what\u2019s happening technologically and sort of riding this wave of what is becoming possible.<\/p>\n
SIMON BROWN: Is this a global conversation that\u2019s happening in the economics field? I imagine it must be.<\/p>\n
HELENYA FOURIE: Yes, for sure it is. There have been a couple of good papers written about it, a couple of books, and I think it\u2019s worth making sure that we are part of this global conversation.<\/p>\n
SIMON BROWN: Yes, a part of the conversation and up to date in a sense.<\/p>\n
A last question. There is a recent paper you were examining, on sort of historical revisions to our GDP. You\u2019re saying there\u2019s a potential that our booms are actually understated, downturns overstated, which \u2013 again for policymakers \u2013 is to use a word which is probably wrong: \u2018sub-optimal\u2019.<\/p>\n
HELENYA FOURIE: For sure. I think that the issue really is that it\u2019s the first GDP release that [becomes] the most dangerous. People wait; they know what data is going to be released. Once it\u2019s revised, very few people care.<\/p>\n
So, if we\u2019re underestimating our booms, it means people are going to put less money in the economy than they actually should. I think that\u2019s a problem. It almost becomes a self-fulfilling prophecy because, if investment is down, GDP is down and maybe not based on accurate numbers.<\/p>\n
SIMON BROWN: Yes, absolutely. And it is those revisions. I\u2019m one of the data nerds who love the revisions, but I suspect I\u2019m [one of those] few and far between.<\/p>\n
We\u2019ll leave it there. Helenya Fourie, senior economist at the Bureau for Economic Research, I appreciate the insights.<\/p>\n
Listen to the full MoneywebNOW podcast every weekday morning here.<\/p>\n
#GDP #limited #measure #SAs #economic #health<\/p>\n","protected":false},"excerpt":{"rendered":"
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