South Africa Economic Forecast

South Africa Economic Outlook

December 13, 2018

An inventory-driven recovery in the third quarter topped analysts’ estimates and ended the technical recession that blighted the economy through the first half of the year. In annualized terms, household spending staged a comeback following a value-added tax hike in the second quarter and appears to have also received a one-off boost from government employees’ back pay. Fixed investment, on the other hand, contracted sharply as firms’ plans were put off by the controversial land-reform debate. Despite a jump in exports, bolstered in part by greater automotive-related volumes, the external sector dragged on headline growth. Meanwhile, a supply-side breakdown revealed an industry- and agriculture-driven rebound in the quarter. Looking ahead to the remainder of the year, improved private-sector metrics through November could hint at a sorely-needed upturn in fixed investment. On the other hand, fiscal woes—compounded by weak growth prospects and rising debt-servicing costs—pushed two of the three credit-rating agencies to keep their junk-status views in recent weeks.

South Africa Economic Growth

Tepid year-end growth prospects aside, FocusEconomics analysts expect the economy to bounce back somewhat next year. Higher real wages and last-ditch fiscal stimulus are likely to lift economic sentiment ahead of next year’s elections and should serve to stoke household spending and fixed investment, respectively. Additional credit-rating downgrades will remain a key downside risk amid tense economic and political anxieties, however. Concerns over fiscal slippage and the inadequate pace of structural reforms are weighing on medium-term growth prospects. FocusEconomics analysts expect growth of 1.6% in 2019, down 0.1 percentage points from last month’s forecast, and 1.9% in 2020.

South Africa Economy Data

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 %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
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)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
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-
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

Bond Yield8.780.29 %Jan 16
Exchange Rate13.72-0.21 %Jan 16
Stock Market0.7-0.44 %Jan 16

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