South African Reserve Bank (SARB) Governor Lesetja Kganyago says the country's economy being revised upwards does not mean South Africans are wealthier, but rather reflects a more accurate understanding of the size of the economy.
Statistics South Africa (Stats SA) recently completed a benchmarking exercise that found the country's economy is approximately 5% larger than previously estimated.
The revision follows an update to the benchmarks used to calculate gross domestic product (GDP), which measures the total value of goods and services produced in the economy. The base year used for comparisons has also been changed from 2015 to 2022.
The exercise is conducted every five years to incorporate updated information and improve the accuracy of economic estimates.
Kganyago says the revised figures also affect how South Africa is perceived internationally, as several economic indicators are measured relative to the size of the economy.
According to the Reserve Bank's September assessment, South Africa's economy is expected to grow by 1.2% this year, while the International Monetary Fund forecasts growth of 1%.
Kganyago says the economy had been showing signs of improvement before the impact of the war, which disrupted economic activity and increased pressure on households.
He believes South Africa's economic position has been strengthened by measures introduced to cushion the country against external shocks.
These include a lower inflation target, stabilising government debt and a decline in the risk premium demanded by foreign investors. The rand has also performed better in the aftermath of the economic shock.
Kganyago says these measures have helped limit the impact of rising fuel costs and enabled the government to provide temporary relief to consumers.
He acknowledges, however, that many South Africans continue to face financial pressure and need to adjust to the challenging economic environment.
The governor also highlighted the importance of public transport in helping commuters manage rising travel costs.
He welcomed the Department of Transport's efforts to reopen additional Passenger Rail Agency of South Africa (PRASA) routes, saying expanded public transport corridors could help ease the financial burden on commuters.
Kganyago says reliable public transport can play an important role in reducing household travel expenses, particularly as South Africans continue to navigate rising living costs.