Assessing the impact of the unrest in South Africa

There is clearly a lot of uncertainty over how the protests in South Africa in recent days will develop but there are reasons to think that the impact on economic activity will be towards the milder end of the spectrum. Perhaps a bigger risk is that the protests signal broader discontent with the current weakness of the economy, limiting the government’s ability to push through austerity and put the public debt position back on to a sustainable path.
Jason Tuvey Senior Emerging Markets Economist
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Africa Economics Weekly

FX orthodoxy in Nigeria? Strikes in SA, Ethiopia’s conflict

Comments by Nigeria’s vice president endorsing a more market-based exchange rate regime reflect growing concern about the distortionary effects of the current FX system, but there is no evidence that key officials backing the existing currency arrangements are also shifting tack. In South Africa, ongoing industrial action in the steel industry will probably dampen manufacturing output in Q4, in another hit to the recovery in the sector and the wider economy. Finally, escalating tensions in Ethiopia raise the spectre of more severe strains in the balance of payments.

15 October 2021

Africa Data Response

Nigeria Consumer Prices (Sep.)

The drop in the headline inflation rate in Nigeria, to 16.6% y/y in September, will ease pressure on the central bank to raise rates and allow policymakers to focus on supporting the economic recovery.

15 October 2021

Africa Data Response

South Africa Activity Data (Aug.)

South Africa’s hard activity data for August point to a bumpy recovery following a large hit to the economy in July, adding to reasons to think that interest rates are unlikely to be raised imminently.

13 October 2021

More from Jason Tuvey

Emerging Europe Data Response

Turkey Industrial Production & Retail Sales (May)

Turkey’s activity figures for May, the month of a three-week national lockdown, showed that the industrial sector came through unscathed but that retail sales were hit hard. More timely evidence suggests that activity has rebounded quickly and, combined with the rise in inflation to a two-year high in June, means that the central bank will almost certainly leave interest rates unchanged tomorrow.

13 July 2021

Africa Economics Weekly

SA wage negotiations, Ethiopia debt restructuring

South Africa’s government is giving up further ground in wage negotiations with trade unions, raising the threat that the austerity plans unravel. Elsewhere, Ethiopia has revealed plans to restructure $1bn of external debt and with the “Common Framework” struggling to accelerate a broader restructuring, the risk of a disorderly default is rising.

9 July 2021

Emerging Europe Economics Update

NBP in no rush to tighten policy

Poland’s central bank left interest rates on hold today and, while it revised up its GDP growth and inflation forecasts, there was little sign in the accompanying press statement that the balance on the MPC has shifted further away from the ultra-dovish stance of the past year. We doubt that there will be a majority in favour of raising interest rates until mid-2022 at the earliest.

8 July 2021
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