South Africa Economic Forecast

South Africa Economic Outlook

May 26, 2020

The economy likely slipped into recession in the first quarter. Supply-side activity collapsed due to troubles at the state-owned utilities provider Eskom; manufacturing output contracted in January–February; and the Covid-19 related lockdown measures hammered domestic demand in March. Turning to the second quarter, the economic panorama has deteriorated even further. Strict containment measures will be hammering investment activity and private spending, with business confidence and the PMI diving to their respective record lows in April, while the unemployment rate seems to have surged. Against this backdrop, the government announced an aid package of up to USD 26.0 billion—about 10.0% of GDP—to support businesses and protect jobs and boost the welfare system. Authorities are set to ease the nationwide lockdown by 1 June, which should give the economy a much-needed respite.

South Africa Economic Growth

The economy is set to plunge into a severe recession this year. Both fixed investment and private consumption are projected to be hard hit by the pandemic, amid rising unemployment and evaporating business confidence. Meanwhile, concerns over debt sustainability due to a ballooning fiscal deficit may prompt the country to seek additional IMF support to prevent a liquidity crisis. FocusEconomics analysts see the economy shrinking 6.4% in 2020, which is down 1.0 percentage point from last month’s forecast, and expanding 2.9% in 2021.

South Africa Economy Data

2014 2015 2016 2017 2018
Population (million)53.955.456.357.157.9
GDP per capita (USD)6,6356,0225,2916,2206,137
GDP (USD bn)358317297350368
Economic Growth (GDP, annual variation in %)1.81.20.41.40.8
Consumption (annual variation in %)0.81.90.62.11.8
Investment (annual variation in %)0.72.5-3.51.0-1.4
Industrial Production (annual variation in %)0.10.00.7-0.5-  
Unemployment Rate25.125.426.727.527.1
Fiscal Balance (% of GDP)-4.3-3.7-3.6-4.0-4.2
Public Debt (% of GDP)47.049.351.553.056.7
Inflation Rate (CPI, annual variation in %, eop)5.35.36.74.74.5
Inflation Rate (CPI, annual variation in %)6.14.66.35.34.6
Policy Interest Rate (%)5.756.257.006.756.75
Exchange Rate (vs USD)11.5715.5013.6812.3814.39
Exchange Rate (vs USD, aop)10.8512.7814.7013.3113.25
Current Account (% of GDP)-5.1-4.6-2.9-2.5-3.5
Current Account Balance (USD bn)-18.1-15.4-8.6-8.9-12.4
Trade Balance (USD billion)-6.9-3.72.24.81.7
Exports (USD billion)94.981.977.086.694.1
Imports (USD billion)10285.574.881.892.3
Exports (annual variation in %)1.7-13.2-5.912.58.6
Imports (annual variation in %)1.3-14.1-12.59.412.8
International Reserves (USD)44.341.842.745.346.4
External Debt (% of GDP)40.637.248.048.848.5

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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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