South Africa Economic Outlook
February 19, 2019South Africa’s economy appears to be slowly turning the page from last year’s short-lived recession, although available fourth-quarter data has been offbeat. On the demand side, retail sales were uneven through December, while the late-year correction in fuel costs sent inflation tumbling towards the South African Reserve Bank’s (SARB) midpoint target in December. Meanwhile, from the supply side, economic sentiment notched a recovery through year-end in line with stabilizing manufacturing-sector gains. All this follows an expectations-defying third-quarter rebound fueled by a build-up of inventories, as well a comeback in household spending on the heels of last year’s value-added tax hike. Looking ahead to the current quarter, however, a number of headwinds threaten to knock the recovery off course. These include this year’s budget announcement on 20 February, which is likely to detail last year’s missed fiscal targets and could throw the government’s sovereign ratings back into the spotlight. Moreover, troubles at Eskom, the state-owned power utility, have sparked rolling blackouts and its crippled finances could potentially destabilize the economy.
South Africa Economic GrowthThis year’s elections are expected to dictate the pace of the recovery over the short-term as Cyril Ramaphosa’s last-ditch economic reforms will depend on a mandate for his African National Congress (ANC). Higher real wages and new business-friendly prescriptions, meanwhile, are expected to lift economic sentiment and stoke household spending and fixed investment, respectively. Key downside risks remain, however, and a credit-rating downgrade by Moody’s would trigger large-scale capital outflows and undermine any short-term recovery. Medium-term growth prospects are being held back by concerns over fiscal slippage and the inadequate pace of reforms. Met the why particular analysts expect growth of 1.6% in 2019, unchanged from last month’s forecast, and 1.9% in 2020.
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South Africa Facts
|Bond Yield||8.66||0.29 %||Mar 11|
|Exchange Rate||14.37||-0.21 %||Mar 11|
|Stock Market||0.6||-0.44 %||Mar 11|
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South Africa Economic News
March 18, 2019
A preliminary estimate revealed little improvement for the manufacturing sector at the outset of the year.
March 5, 2019
South Africa’s economy slumped through last year-end but nonetheless expanded modestly in seasonally-adjusted and annualized (saar) terms.
March 5, 2019
In February, the Standard Bank Purchasing Managers’ Index (PMI) climbed 0.6 points to 50.2 points, landing above the 50-point threshold that distinguishes improvement from deterioration in the South African private sector for the first time in eight months. February’s reading reflected a more moderate fall in new orders, as well as stabilizing output on the heels of a seven-month decline.
February 20, 2019
Consumer prices fell 0.2% from a month earlier in January, in line with December’s outturn but landing below analysts’ expectations.
February 12, 2019
A preliminary estimate showed an ailing manufacturing sector in December.