South Africa Economic Forecast

South Africa Economic Outlook

October 15, 2019

Economic activity in the third quarter appeared bleak, following the second quarter’s notable rebound. In July–August, manufacturing and mining output continued to shrink, and electricity supply swung to decline, while retail sales growth slid in July and the PMI fell in September. Meanwhile, the country’s fiscal challenges continue to mount, with Fitch Ratings downgrading Eskom’s stand-alone credit rating further into junk territory on 30 September. The cut affirmed the state power provider’s waning ability to ease its hefty debt load, intensifying the pressure on public finances. In the latest bid to alleviate Eskom’s cost burden somewhat, ministers called on coal producers to slash prices. Furthermore, the National Treasury’s bailout conditions—presented to Parliament on 9 October and which will require monthly updates to monitor debt repayments and minimize default risk—have eased Eskom’s risk premium.

South Africa Economic Growth

The economy is seen gaining traction next year, thanks to stronger domestic demand aided by easing constraints on power supply. Improving investor sentiment and favorable monetary conditions should help bring about a turnaround in private consumption and fixed investment. That said, fiscal challenges could worsen as Eskom may need yet more funds next year. FocusEconomics analysts see growth at 1.4% in 2020, which is down 0.1 percentage points from last month’s forecast, and 1.7% in 2021.

South Africa Economy Data

20132014201520162017
Population (million)53.153.954.855.656.5
GDP per capita (USD)6,7156,6356,0945,3516,284
GDP (USD bn)357358334298355
Economic Growth (GDP, annual variation in %)2.51.81.20.41.4
Consumption (annual variation in %)2.00.81.90.62.1
Investment (annual variation in %)7.20.72.5-3.51.0
Industrial Production (annual variation in %)1.30.10.00.7-0.5
Unemployment Rate24.725.125.426.727.5
Fiscal Balance (% of GDP)-4.4-4.3-4.1-3.8-4.4
Public Debt (% of GDP)44.147.049.351.553.0
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)-5.8-5.1-4.6-2.9-2.5
Current Account Balance (USD bn)-20.6-18.1-15.4-8.6-8.9
Trade Balance (USD billion)-7.2-6.9-5.01.25.8
Exports (USD billion)93.394.984.776.290.3
Imports (USD billion)10110289.675.184.5
Exports (annual variation in %)-6.61.7-10.8-10.018.5
Imports (annual variation in %)-3.81.3-12.0-16.312.6
International Reserves (USD)44.844.341.842.745.3
External Debt (% of GDP)38.340.637.248.048.8

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South Africa Facts

ValueChangeDate
Bond Yield8.100.29 %Sep 04
Exchange Rate14.81-0.21 %Sep 04
Stock Market0.1-0.44 %Sep 04

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