South Africa Economic Forecast

South Africa Economic Outlook

August 25, 2020

GDP is expected to have shrunk markedly in Q2 as the country felt the full blow from Covid-19. Both manufacturing output and merchandise exports plunged by nearly a third amid muted global demand and disrupted supply chains. Moreover, retail sales contracted by over a fifth, spelling trouble for household spending. More encouragingly, turning to Q3, business sentiment improved somewhat in July, while the PMI pulled further away from May’s record low in the same month. Moreover, on 17 August, the government eased some lockdown measures, as the virus appeared to have reached its peak. The authorities lifted the ban on tobacco and alcohol sales and allowed domestic travel and businesses to reopen in a bid to boost economic activity. In addition, the IMF approved USD 4.3 billion in financial support in late July, boding well for momentum going forward.

South Africa Economic Growth

The economy is expected to contract sharply this year due to Covid-19. Weak global demand will cripple the external sector, while domestic lockdown measures will constrain household and capital spending. Moreover, weak fiscal accounts and elevated government debt levels, which threaten the country’s credit rating, cloud the outlook further. FocusEconomics panelists see the economy shrinking 8.0% in 2020, which is down 0.3 percentage points from last month’s forecast, and expanding 3.4% in 2021.

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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