Dovish SARB to keep rates low for some time

Policymakers in South Africa kept their benchmark rate unchanged at 3.50% today and the dovish tone of the communications supports our view that interest rates won’t rise until the middle of next year.
Virag Forizs Emerging Markets Economist
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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

Africa Chart Book

Omicron shines spotlight on low vaccine coverage

The emergence of the Omicron strain of COVID-19 reinforces the need to boost vaccine coverage in Sub-Saharan Africa from current low levels. Most countries have administered at least one vaccine dose to less than 20% of their populations. The South African authorities’ initial response to the ‘Omicron threat’ was to urge the take-up of vaccines, rather than tightening containment measures. And so long as vaccine coverage is low, the risk of intermittent curbs on activity to relieve strains in health care sectors will linger with future virus waves and variants. Achieving such vaccine coverage will probably take some time even as Africa’s vaccine supplies – including from China and India – look set to increase over the coming quarters.

30 November 2021

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Africa Data Response

South Africa Consumer Prices (Jun.)

South Africa’s headline inflation rate eased in June, to 4.9% y/y, and with soft underlying price pressures and clouds over the economic recovery, the Reserve Bank will stand pat at tomorrow’s MPC meeting. Indeed, we think the repo rate will remain unchanged well into next year.

21 July 2021

Africa Economics Update

South Africa’s unrest: the fallout for the public finances

The disruption to economic activity from the unrest and violence in South Africa, which now appears to be dissipating, will probably prove to be limited, but the impact on the public finances is likely to be more significant. In particular, there is a rising likelihood that the authorities scale back their fiscal consolidation plans, which would leave the public debt ratio on a worrying upwards trajectory.

16 July 2021

Africa Data Response

Nigeria Consumer Prices (Jun.)

The latest drop in Nigeria’s headline inflation rate, to 17.8% y/y in June, is likely to reassure policymakers that price pressures are softening and that policy tightening is not necessary to curb inflation. We think that monetary policy settings will remain unchanged over our forecast horizon.

16 July 2021
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