South Africa Economic Forecast

South Africa Economic Outlook

November 14, 2017

The most recent data suggests that the economy continues to struggle after coming out of a technical recession in the second quarter. In the government’s medium-term budget policy statement released in October, the government confirmed that the fiscal deficit for the 2017/2018 fiscal year is expected to reach 4.3%, widening from the 3.1% fiscal shortfall observed in the previous fiscal year and the largest fiscal shortfall since 2009. The unemployment rate in Q3 remained extremely elevated at 27.7%, the same print observed in the previous quarter, a bad sign for private consumption. Manufacturing production contracted in September, and the latest PMI data from October point to another month of falling output. The latest batch of economic data and the somber outlook given by the government in the budget policy statement have raised the alarm of a possible credit rating downgrade in late November by Moody’s and S&P Global Ratings, which could set the tone for the key ANC leadership contest in December.

South Africa Economic Growth

The economy is expected to recover in 2018 and 2019 on higher prices for commodities. Growth, however, remains constrained as incessant political noise has stalled implementation of reforms and is weighing on consumer and business confidence. Further credit downgrades or lower prices for commodities could also dent growth. Met the why particular panelists expect the economy to grow 1.3% in 2018 and 1.8% in 2019.

South Africa Economy Data

20122013201420152016
Population (million)52.453.254.155.055.9
GDP per capita (USD)7,5996,7046,6216,0655,299
GDP (USD bn)398357358334296
Economic Growth (GDP, annual variation in %)2.22.51.71.30.3
Consumption (annual variation in %)3.72.00.71.70.8
Investment (annual variation in %)2.67.21.72.3-3.9
Industrial Production (annual variation in %)2.21.30.10.00.7
Unemployment Rate24.924.725.125.426.7
Fiscal Balance (% of GDP)-4.5-4.1-3.7-3.6-3.3
Public Debt (% of GDP)41.044.147.049.351.7
Inflation Rate (CPI, annual variation in %, eop)5.75.45.35.36.8
Inflation Rate (CPI, annual variation in %)5.65.86.14.66.3
Policy Interest Rate (%)5.005.005.756.257.00
Exchange Rate (vs USD)8.4811.4711.5715.5013.68
Exchange Rate (vs USD, aop)8.219.6511.8512.7814.70
Current Account (% of GDP)-5.1-5.9-5.3-4.4-3.3
Current Account Balance (USD bn)-20.4-21.0-19.0-14.7-9.7
Trade Balance (USD billion)-4.6-7.0-7.7-4.21.7
Exports (USD billion)99.993.694.185.576.8
Imports (USD billion)11511111289.675.2
Exports (annual variation in %)-14.3-6.30.6-9.2-11.1
Imports (annual variation in %)-5.0-3.81.3-12.0-16.1
International Reserves (USD)44.144.844.341.842.7
External Debt (% of GDP)35.638.311.537.248.2

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South Africa Facts

ValueChangeDate
Bond Yield9.180.29 %Dec 06
Exchange Rate13.53-0.21 %Dec 06
Stock Market0.1-0.44 %Dec 06

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