South Africa Economic Forecast

South Africa Economic Outlook

March 19, 2019

Fourth-quarter growth confirmed the South African economy’s slow but steady comeback from last year’s short-lived recession. On the demand side, fixed investment fell for the fourth quarter in a row as economic unrest pushed firms to rethink their outlays on machinery and equipment; by the same token, this also bruised imports. Household spending, on the other hand, was upbeat despite elevated inflation, as was government spending. Meanwhile, exports appeared to benefit from a cyclical pick-up across the region. Looking ahead, available current-quarter data hints at a protracted recovery. Moreover, rolling blackouts in recent weeks have highlighted Eskom’s shortcomings. The state-owned power utility’s crippled finances took center-stage when this year’s budget was presented on 20 February. Although analysts praised Tito Mboweni’s plans as a net-positive for the ailing economy, they were also quick to note that an Eskom bailout could push this year’s fiscal deficit beyond 4.0% of output.

South Africa Economic Growth

South Africa’s short-term recovery will hinge on Cyril Ramaphosa’s last-ditch economic reforms and, in turn, a mandate for his African National Congress on 8 May. Meanwhile, higher real wages and new business-friendly prescriptions should help lift economic sentiment. Notably, some analysts expect Mboweni’s budget to have averted a credit-rating downgrade by Moody’s. FocusEconomics analysts expect growth of 1.6% in 2019, unchanged from last month’s forecast, and 1.9% 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)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)-7.2-6.9-5.01.26.0
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

ValueChangeDate
Bond Yield8.740.29 %Mar 20
Exchange Rate14.37-0.21 %Mar 20
Stock Market0.6-0.44 %Mar 20

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