South Africa Economic Forecast

South Africa Economic Outlook

May 21, 2019

In general elections held on 8 May, the ruling African National Congress secured a comfortable majority as had been widely expected by analysts, winning 58% of the vote. The result, although down from the 62% garnered in 2014, provides President Cyril Ramaphosa with a clear mandate to govern—raising expectations over his commitment to push through badly-needed structural reforms. The election comes against a rather downbeat economic backdrop. Although manufacturing output picked up in March, its average growth through the first quarter landed below that of the fourth quarter of 2018. This, coupled with businesses turning more pessimistic in the quarter, points to weaker dynamics within the private sector. Moreover, tepid retail sales growth through the first quarter, combined with higher unemployment and lower consumer confidence, hints that private consumption lost momentum. On the upside, the PMI returned to positive territory and hit a 10-month high in April, boding well for economic activity at the outset of the second quarter.

South Africa Economic Growth

Economic activity should pick up some momentum this year but will nonetheless remain lackluster. Although fixed investment should recover gradually, private consumption is seen losing pace amid higher unemployment and inflation. In the near-term, policy uncertainty ahead of Ramaphosa’s state-of-the-nation address provides some downside risk for growth prospects. FocusEconomics analysts see growth at 1.2% in 2019, which is down 0.2 percentage points from last month’s forecast, and at 1.7% in 2020.

South Africa Economy Data

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 %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
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)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)5.005.756.257.006.75
Exchange Rate (vs USD)10.4711.5715.5013.6812.38
Exchange Rate (vs USD, aop)9.6510.8512.7814.7013.31
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-
Exports (USD billion)93.394.984.776.290.5
Imports (USD billion)10110289.675.184.5
Exports (annual variation in %)-6.61.7-10.8-10.018.7
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)38.340.637.248.148.8

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South Africa Facts

Bond Yield8.390.29 %Jun 13
Exchange Rate14.89-0.21 %Jun 13
Stock Market0.7-0.44 %Jun 13

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