South Africa Economic Forecast

South Africa Economic Outlook

March 20, 2018

The latest data suggests that the South African economy has turned a corner. National accounts data for the fourth quarter of 2017 surprised on the upside, with a sharp quarter-on-quarter expansion driven by private consumption and fixed investment. In January, manufacturing output expanded for the fourth consecutive month, recording its sharpest increase since June 2016. Survey-based data for February was equally positive; there was a notable jump in the Standard Bank PMI and strong business confidence. Improved confidence in the economy among businesses largely reflected the political developments since Cyril Ramaphosa took over as head of the ANC in December and subsequently replaced Jacob Zuma as president. Ramaphosa, who was sworn in on 15 February, has taken steps to change the direction of economic policy, including a cabinet reshuffling which saw the reappointment of Nhlanhla Nene as finance minister and a budget that will hike taxes to contain the bloated fiscal deficit and potentially help avert a credit rating downgrade.

South Africa Economic Growth

The presidency of Cyril Ramaphosa should contribute to a recovery in business and consumer confidence, in turn helping buoy growth in private consumption and fixed investment. Higher prices for commodities will sustain growth in mining and in the external sector. FocusEconomics panelists expect the economy to grow 1.7% in 2018, which is up 0.2 percentage points from last month’s forecast, and 1.8% in 2019.

South Africa Economy Data

Population (million)52.453.
GDP per capita (USD)7,5996,7046,6216,0655,299
GDP (USD bn)398357358334296
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
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)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
Exchange Rate (vs USD)8.4810.4711.5715.5013.68
Exchange Rate (vs USD, aop)8.219.6510.8512.7814.70
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)10510110289.675.2
Exports (annual variation in %)-14.3-6.30.6-9.2-10.1
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)35.638.340.537.248.2

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South Africa Facts

Bond Yield8.010.29 %Mar 22
Exchange Rate11.89-0.21 %Mar 22
Stock Market0.1-0.44 %Mar 22

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