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South Africa GDP (Q3)

South Africa’s GDP contracted by 1.5% q/q in Q3 as violent unrest and a third virus wave hit the economy hard, and the more recent data suggest that activity remained depressed even before the latest rise in COVID-19 cases driven by the Omicron variant. Against this backdrop, monetary policy tightening is unlikely to be as aggressive as most currently anticipate.
Virag Forizs Emerging Markets Economist
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Africa Data Response

Nigeria GDP (Q1)

Nigeria’s GDP growth slowed to 3.1% y/y in Q1 as robust growth in the non-oil sector was more than offset by a slump in the oil sector. Looser fiscal policy ahead of elections in early 2023 will provide some support to activity going forward, but continued weakness in oil production and disruptions caused by draconian FX policies underpin our below-consensus forecast for growth of 2.3% over 2022 as a whole.

23 May 2022

Africa Economics Weekly

Markets and monetary policy, mounting pressure on naira

Recent investor risk-off sentiment has pushed up sovereign dollar bond yields across Sub-Saharan Africa, fuelling debt risks further, and has put currencies under pressure. Central banks appear to be taking note, with some policymakers turning tightening cycles up a notch. In Nigeria, the recent weakness of the currency on the black market was attributed to election-related spending, but the bigger issue is that downward pressure on the naira stems from the central bank’s unorthodox FX policies.

20 May 2022

Africa Economics Update

Hawks’ majority in SARB to be short-lived

Policymakers in South Africa upped the pace of tightening today, raising the repo rate by 50bp to 4.75%, as concerns about inflation (and inflation expectations in particular) have grown. We don’t think that the hawks will have their way for long though as the tightening cycle is likely to revert to a more gradual pace from the second half of this year.

19 May 2022

More from Virag Forizs

Africa Economics Weekly

Lockdown lessons from SA, influx of jabs and cash?

South African policymakers appear to be reluctant to impose restrictions in the face of the threat from the Omicron variant, but their hand could be forced if the health system comes under strain. In previous waves, measures have been tightened when hospitalisations have breached 5,000. While we’re some way off that, the figures are on an upwards path. Meanwhile, ambitious pledges by Africa’s key development partners including China and the EU on vaccines and infrastructure investment will lift the region’s longer-term economic prospects. Finally, even with the IMF on board, restoring Zambia’s debt sustainability will remain challenging.

3 December 2021

Africa Economics Update

Debt sustainability in Zambia: mission impossible?

Zambia’s new administration has made encouraging noises about restoring macroeconomic stability and addressing the country’s public debt problem. But it will be a tall order to secure a large restructuring and stick to the fiscal consolidation that will be needed to leave the public debt ratio on an even keel.

2 December 2021

Africa Data Response

South Africa Manufacturing PMI (Nov.)

South Africa’s manufacturing PMI rebounded last month, but the emerging fourth virus wave and the threat from the Omicron variant has clouded the outlook for activity in the sector and the wider economy.

1 December 2021
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