(Ecofin Agency) - South Africa narrowly avoided a technical recession, which occurs when the economy shrinks for two straight quarters. The country achieved a small growth of 0.1% in Q4 2023, following a decline of 0.2% in the third quarter, according to a report from the South African Statistics Agency (Stats SA) on Tuesday, March 5.

A decrease in power outages by Eskom, the national electricity provider, helped prevent a complete shutdown of the electrical grid. This action notably boosted energy-intensive sectors, like mining and manufacturing, in Q4 2023. Finance and transportation also helped with the growth. However, Stats SA pointed out that the growth rate for the entire year of 2023 was only 0.6%, down from 1.9% in 2022.

Since 2008, South Africa has been struggling with a major energy crisis due to Eskom's struggles to supply enough electricity, compounded by old coal power plants and a lack of new power generation. Economic challenges have been worsened by Transnet, the logistics firm, failing to fully operate its railways and ports, which affects exports and the import of necessary goods for production.

Ongoing issues with transportation and regular power cuts are expected to keep affecting South Africa's economic growth shortly. The government is predicting a modest increase in the economy of 1.3% this year, which is not enough to significantly reduce widespread unemployment and poverty.