South Africa Economic Forecast

South Africa Economic Outlook

August 24, 2021

Available data for Q2 paints a mixed picture: Manufacturing production contracted in monthly terms in the quarter, and authorities tightened restrictions following a surge in infections from end-May. However, business sentiment improved in Q2 compared to Q1, and the private sector PMI averaged higher overall. Turning to Q3, some restrictions were eased on 26 July amid an accelerating vaccination drive, which should continue to improve as locally manufactured vaccines and the arrival of around 5.7 million jabs from the U.S. boost supplies. However, an explosion at a power unit in early August, coupled with already recurrent energy shortages, will be putting pressure on activity. Meanwhile, following the riots that broke out in mid-July, President Ramaphosa reshuffled his cabinet, replacing Finance Minister Tito Mboweni with Enoch Godongwana. This weakened the rand, as investors trusted Mboweni to get spending and debt under control.

South Africa Economic Growth

The economy is set to recover from 2020’s downturn this year, bolstered by a revival in foreign demand as the effects of the pandemic fade. However, social unrest, an increasing unemployment rate and frail public finances all pose downside risks, while ongoing power shortages will add further pressure. FocusEconomics panelists see the economy expanding 4.2% in 2021, which is down 0.1 percentage points from last month’s forecast, and 2.5% in 2022.

South Africa Economy Data

2015 2016 2017 2018 2019
Population (million)55.456.357.157.958.8
GDP per capita (USD)6,0225,2916,2206,1376,121
GDP (USD bn)317297350368360
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)2.5-3.51.0-1.4-0.9
Industrial Production (annual variation in %)0.00.7-0.5-  -  
Unemployment Rate25.426.727.527.128.7
Fiscal Balance (% of GDP)-3.7-3.6-4.1-4.0-6.3
Public Debt (% of GDP)49.351.553.056.762.2
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
Exchange Rate (vs USD)15.5013.6812.3814.3913.98
Exchange Rate (vs USD, aop)12.7814.7013.3113.2514.45
Current Account (% of GDP)-4.6-2.9-2.5-3.5-3.0
Current Account Balance (USD bn)-14.6-8.5-8.9-13.1-10.6
Trade Balance (USD billion)-
Exports (USD billion)80.676.487.894.190.2
Imports (USD billion)84.374.382.992.387.5
Exports (annual variation in %)-13.9-
Imports (annual variation in %)-14.6-11.911.711.3-5.2
International Reserves (USD)41.842.745.346.448.9
External Debt (% of GDP)

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South Africa Facts

Value Change Date
Bond Yield8.260.29 %Dec 31
Exchange Rate13.98-0.21 %Dec 31
Stock Market0.1-0.44 %Jan 06

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