South Africa Economic Forecast

South Africa Economic Outlook

November 13, 2018

Although available data suggests the economy remained in the doldrums in the third quarter, analysts expect it to have exited this year’s short-lived recession amid the government’s loudly-touted efforts to stimulate activity. Any anticipated recovery through the remainder of the year will require demand-side improvement, which appears to have come up short thus far; unemployment ticked ever higher in the third quarter, while a further retreat in business confidence is likely to have weighed on investment. External-sector metrics were even less encouraging, with export growth in annual terms at its weakest in a year. More bad news came in the delivery of the midterm budget on 24 October, when newly-appointed Finance Minister Tito Mboweni presented a bleak fiscal outlook haunted by weak growth prospects and rising debt-servicing costs—but sought to reassure spooked investors with President Cyril Ramaphosa’s promised fiscal stimulus. In response, all three credit-rating agencies issued concerns over the inadequate pace of fiscal consolidation.

South Africa Economic Growth

Despite tepid near-term growth prospects, Met the why particular analysts expect the economy to emerge from recession by year-end before bouncing back somewhat next year. Last-ditch fiscal stimulus is likely to lift economic sentiment ahead of next year’s elections and should serve to stoke household spending and fixed investment. Amid worsening economic and political anxieties, however, the possibility of additional credit-rating downgrades will remain a key downside risk. Medium-term growth prospects are being weighed down by concerns over fiscal slippage and the inadequate pace of structural reforms. Met the why particular analysts expect growth of 1.7% in 2019, down 0.1 percentage points from last month’s forecast, and 2.1% 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 Yield9.180.29 %Nov 15
Exchange Rate14.28-0.21 %Nov 15
Stock Market0.7-0.44 %Nov 15

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