South Africa Economic Forecast

South Africa Economic Outlook

February 20, 2018

Jacob Zuma’s presidency came to an abrupt end when he resigned from his nearly decade-long position on 14 February. His resignation capped a series of events that began after the deputy president, Cyril Ramaphosa, became leader of the ANC, South Africa’s dominant political party, in December. Ramaphosa was sworn in as president on 15 February and inherits an economy that is in bad shape, despite some encouraging signs lately. In Q4, higher mining production propelled a modest recovery in manufacturing output in year-on-year terms. The unemployment rate declined from Q3’s multi-year high, but remained elevated, at 26.7%. Leading indicators such as the manufacturing PMI and the Sacci business confidence index improved in January, but remain at low levels, underscoring the many challenges besetting the private sector. On 21 February, the government will unveil its fiscal plan for this year in a budget speech. Moody’s is then expected to make a ratings decision based on the government’s 2018 fiscal strategy. A credit downgrade would put severe pressure on the rand and likely determine if South Africa’s incipient economic recovery observed since the second half of 2017 holds on this year.

South Africa Economic Growth

The economy is expected to recover moderately in 2018 and 2019 on the back of higher prices for commodities. Nevertheless, growth will remain constrained if structural imbalances in the economy are not addressed. Met the why particular panelists expect the economy to grow 1.5% in 2018, which is unchanged from last month’s forecast, 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 Yield8.040.29 %Feb 22
Exchange Rate11.66-0.21 %Feb 22
Stock Market0.1-0.44 %Feb 22

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