South Africa Economic Forecast

South Africa Economic Outlook

July 17, 2018

A loss of momentum at the outset of the year left analysts speculating on whether the effects of “Ramaphoria”, the bounce in economic sentiment that followed the new president’s early-year appointment, had worn off. A weak first-quarter reading, held back by contracting investment and moderating consumer spending, highlighted the economic hurdles facing Cyril Ramaphosa, as the country heads in next year’s general election. Available data for the second quarter was, however, more balanced; the emerging-market selloff eased its battering of the rand in June, which should lessen the pinch to consumers following April’s VAT hike. Moreover, despite ticking downward since the beginning of the year, business confidence remained high as firms continued to believe in Ramaphosa’s commitment to structural reforms. Meanwhile, the manufacturing sector appeared to get back on track through May as automotive output inched up, blunting immediate fears over a technical recession in the first half of the year.

South Africa Economic Growth

Greater political stability and firm credit ratings bode well for the economy in 2018 as full-year economic prospects look set to largely ride out the weak first quarter. Real wage gains should support stronger household spending this year, while the government’s push to attract investment should bolster capital outlays. Nevertheless, fiscal slippage and a slow reform agenda are likely to constrain growth over the medium term. FocusEconomics analysts expect growth of 1.6% in 2018, down 0.3 percentage points from last month’s forecast, and 2.0% in 2019.

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 Yield9.020.29 %Aug 15
Exchange Rate14.65-0.21 %Aug 15
Stock Market0.8-0.44 %Aug 09

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