Page 26 - TKZN Annual Report 2023/2024

SITUATIONAL ANALYSIS
Tourism KwaZulu-Natal executes its mandate and seeks to achieve its vision and mission in a complex environment, impacted by global, national and provincial events, which directly affect the pursuit of its desired impact and in delivering on its mandate.
EXTERNAL ENVIRONMENT ANALYSIS
Macro-Economic Environment
World economic growth continues to experience steady but low growth. The International Monetary Fund (IMF) predicts 3,2% global growth for both 2024 and 2025, this is similar to the 2023 global output growth rate. However, this represents a reduction of 0.3% and 3.3% when compared to 2022 and 2021 respectively. Advanced economies are expected to grow from 1.6% in 2023 to 1.7% in 2024. On the contrary, growth in emerging markets and developing economies is expected to decline by 0.1% from 4.3% in 2023 to 4.2% in 2024. Multiplying global risks such as geopolitical risks, political uncertainty amid elections and high levels of inflation have contributed to slowing growth in emerging markets and developing economies.
China’s growth prospects have been revised down to 4.6% in 2024 from 5.2% in 2023. A slowdown in China means a slowdown in the world, as that nation’s demand has been key to global growth over the past few decades. Elsewhere in emerging Asia, as well as in Latin America, economic activity has been well below expectation with the exception of India (6.8%). The Eurozone, a key South African trading partner, is expected to grow by 0.8% in 2024.
Emerging markets and developing economies are expected to drive global growth between 2023 and 2025 with an average contribution of 4.2%. South Africa’s initial forecast growth for 2024 was 1% in January. However, it has been revised down to 0.9% in April, the IMF cited issues relating to increasing logistical constrains, political uncertainty and elevated borrowing costs. The country’s economic output is expected to grow by 1.2% in 2025.
Figure 1: GDP growth forecasts 2024
Source: International Monetary Fund (IMF)
As South Africa’s GDP growth trend has continued to decline, debt levels have continued to rise. Exacerbating the less favourable global conditions, local contributing factors to the slowdown have included policy uncertainty, electricity supply instability, lower investment levels, insufficient investment by state-owned companies, and poor educational outcomes.
24 TOURISM KWAZULU-NATAL ANNUAL REPORT 2023/2024