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South Africa Consumer Prices (May)

The rise in inflation in South Africa to an above-target 6.5% y/y in May is likely to shift the debate to a choice between a 50bp and a 75bp hike to interest rates at July’s MPC meeting. But inflation continues to be driven by food and energy price effects and, if the headline rate falls sharply over the rest of this year as we expect, interest rates will probably be raised by less than investors anticipate over 2022-24.
Jason Tuvey Senior Emerging Markets Economist
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Africa Economics Update

Kenya Election Result

After nearly a week since voters went to the ballot box, William Ruto was finally announced President-elect in Kenya, but investors’ roller-coaster ride will probably continue over the coming days and weeks with political risks set to run high.Following Kenya’s elections on 9th August, results were announced today with William Ruto (currently Deputy President) declared the official winner of the…

15 August 2022

Africa Data Response

Nigeria Consumer Prices (Jul.)

Inflation in Nigeria jumped to 19.6% y/y last month and we think that the headline rate will rise a bit further. Policymakers are likely to respond by raising the benchmark interest rate from 14.00% to 14.50% at the next MPC meeting in September, but we suspect the tightening cycle will not run beyond that as price pressures start to ease and the elections come into view.

15 August 2022

Africa Economics Update

Nigeria’s recovery looking bleak

The latest data out of Nigeria suggest that GDP growth weakened further in Q2. Ongoing production problems in the oil sector will drag on growth in the coming year and, while that is likely to be offset by fiscal stimulus ahead of February’s elections, we think the economy will fare worse than most expect in 2022-23.

15 August 2022

More from Jason Tuvey

Africa Economics Update

Where next for inflation in South Africa?

Inflation in South Africa has been close to the top of the central bank’s target range in recent months, but the country has avoided the surge in inflation seen across much of the world. And there are reasons to think that the headline rate will drop back sharply by the end of this year. That underpins our view that monetary policy will ultimately be tightened by less than investors currently expect.

21 June 2022

Emerging Europe Economics Update

Key questions on capital controls in Turkey

The recent falls in the Turkish lira have led to increased speculation that, with the CBRT showing no sign of willingness to raise interest rates, policymakers will be forced to turn to capital controls to prevent sharp and disorderly moves in the currency and contain risks in the financial system. In this Update, we answer a number of key questions on capital controls, including what form they could take, when they might be imposed and how effective they would be. World with Higher Rates - Drop-In (21st June, 10:00 ET/15:00 BST): Does monetary policy tightening automatically mean recession? Are EMs vulnerable? How will financial market returns be affected? Join our special 20-minute briefing to find out what higher rates mean for macro and markets. Register now

16 June 2022

Emerging Europe Data Response

Turkey Industrial Production & Retail Sales (Apr.)

Turkey’s activity figures for April suggest that the economy has held up well since last year’s currency crisis, but robust activity has added to inflation pressures and contributed to the widening of the current account deficit, putting the lira under pressure. With interest rate hikes off the cards, sharp and disorderly falls in the currency are a key threat over the coming weeks.

13 June 2022
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