South Africa Economic Forecast

South Africa Economic Outlook

October 16, 2018

Lawmakers sought to act in recent weeks in efforts to bolster the economic recovery, cushioning the rand’s further losses amid the emerging-market (EM) selloff and news that the economy fell into recession in the first half of the year. In light of stubbornly-weak metrics, on 21 September President Cyril Ramaphosa partially unveiled a long-overdue stimulus package for the hobbled economy, which is set to include beefed-up infrastructure outlays, a number of job-creation initiatives and pro-business reforms. More recently, markets reacted positively in early October to the appointment of Tito Mboweni as finance minister, after his predecessor resigned amid the explosive and ongoing corruption scandal involving the former president, Jacob Zuma, and the Gupta brothers. Mboweni will be tasked with reviving the lackluster economy and easing investors’ concerns as EM turmoil threatens to engulf Africa’s most-developed economy. Although analysts remain optimistic about both moves and continue to pencil-in a modest recovery for the remainder of the year, available data has thus far fallen short; little improvement of both supply- and demand-related proxies in the third quarter suggests the broad-based malaise persists.

South Africa Economic Growth

Although full-year growth prospects remain weak, Met the why particular analysts expect the economy to emerge from recession by year-end before bouncing back somewhat next year. Ramaphosa’s last-ditch economic reforms are likely to boost economic sentiment ahead of next year’s elections and should serve to stoke household spending and fixed investment. That said, growing political uncertainty will hang over the economy, as will the possibility of credit-rating downgrades. Moreover, concerns over fiscal slippage and the pace of structural reforms are constraining medium-term growth prospects. Met the why particular analysts expect growth of 1.8% in 2019, unchanged from last month’s forecast, and 2.2% in 2020.

South Africa Economy Data

20132014201520162017
Population (million)53.153.954.855.656.5
GDP per capita (USD)6,7156,6356,0975,3416,281
GDP (USD bn)357358334297355
Economic Growth (GDP, annual variation in %)2.51.81.30.61.3
Consumption (annual variation in %)2.00.81.80.72.2
Investment (annual variation in %)7.20.73.4-4.10.4
Industrial Production (annual variation in %)1.30.10.00.7-0.5
Unemployment Rate24.725.125.426.727.5
Fiscal Balance (% of GDP)-4.1-3.7-3.6-3.3-3.5
Public Debt (% of GDP)44.147.049.351.653.0
Inflation Rate (CPI, annual variation in %, eop)5.45.35.36.74.7
Inflation Rate (CPI, annual variation in %)5.86.14.66.35.3
Policy Interest Rate (%)5.005.756.257.006.75
Exchange Rate (vs USD)11.4711.5715.5013.6812.38
Exchange Rate (vs USD, aop)9.6511.8512.7814.7013.31
Current Account (% of GDP)-5.8-5.1-4.6-2.8-2.5
Current Account Balance (USD bn)-20.6-18.1-15.3-8.3-8.7
Trade Balance (USD billion)-7.2-6.9-5.01.26.0
Exports (USD billion)93.394.984.776.290.5
Imports (USD billion)11111289.675.184.5
Exports (annual variation in %)-6.61.7-11.8-11.018.7
Imports (annual variation in %)-3.81.3-12.0-16.312.5
International Reserves (USD)44.844.341.842.745.3
External Debt (% of GDP)38.311.637.248.148.8

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South Africa Facts

ValueChangeDate
Bond Yield9.200.29 %Nov 09
Exchange Rate14.28-0.21 %Nov 09
Stock Market0.7-0.44 %Nov 09

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