South Africa Economic Forecast

South Africa Economic Outlook

June 21, 2022

The economy returned to pre-pandemic levels as economic growth accelerated in the first quarter. The print was driven by increases in household consumption and exports of goods and services, although the pace of expansion eased for both. Activity seemingly began to worsen in the second quarter. Business conditions improved at a softer pace in April and May compared to the prior quarter, with activity disrupted by the devastating floods in the KwaZulu-Natal region. Business sentiment tanked further in the same two months. Furthermore, manufacturing production contracted at a six-month steep pace in April. Meanwhile, elevated inflation will have dented household spending. More positively, the war in Ukraine is buoying exports of coal to Europe, boding well for the external sector. Lastly, in mid-June the World Bank approved a USD 474 million loan to fund Covid-19 vaccine purchases.

South Africa Economic Growth

The pace of economic growth is forecast to moderate this year. Adverse weather and power cuts are dragging markedly on activity, while the very high unemployment rate and rising inflation are denting household spending. The controversial employment quotas may exacerbate social tensions. Covid-19 remains a risk as well, due to a low vaccination rate. FocusEconomics panelists see the economy expanding 2.0% in 2022, which is up 0.1 percentage points from last month’s projection, and 1.7% in 2023.

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 %)1.20.41.40.80.2
Consumption (annual variation in %)1.90.62.11.81.1
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)5.36.74.74.54.0
Inflation Rate (CPI, annual variation in %)4.66.35.34.64.1
Policy Interest Rate (%)6.257.006.756.756.50
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)-3.72.14.91.82.7
Exports (USD billion)80.676.487.894.190.2
Imports (USD billion)84.374.382.992.387.5
Exports (annual variation in %)-13.9-5.215.07.2-4.2
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)37.248.048.848.551.4

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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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