SA to struggle to get back on economic feet after July hit

South Africa’s hard activity data for July underscored the severe blow to the retail and manufacturing sectors from violent unrest and tighter virus restrictions. While much of the hit has probably unwound more recently, weak growth momentum increases the risk of a contraction in GDP over Q3 as a whole.
Virag Forizs Emerging Markets Economist
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Africa Data Response

South Africa Consumer Prices (Sep.)

Although South Africa’s headline inflation rate picked up to 5.0% y/y in September, soft underlying price pressures and a fragile economic recovery mean that policymakers will only normalise monetary policy gradually. By contrast, investors currently appear to expect a relatively aggressive tightening cycle.

20 October 2021

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

More from Virag Forizs

Africa Data Response

Nigeria Consumer Prices (Aug.)

The drop in the headline inflation rate in Nigeria, to 17.0% y/y in August was, once again, driven by easing food price pressures, although core inflation also eased. This is likely to reassure policymakers and we expect the benchmark rate to remain unchanged this month and beyond.

15 September 2021

Africa Economics Update

Ethiopia: debt risks loom larger with escalating conflict

Ethiopia’s escalating internal conflict has reignited concerns about the country’s public debt position. While debt dynamics may not look that worrisome on the surface, the political situation threatens the country’s otherwise strong economic growth and the currency’s stability – two key assumptions that debt sustainability rests on. A sovereign default is an increasing risk.

8 September 2021

Africa Economics Weekly

Zambia’s new president off to a good start, SOEs in SA

Zambia’s newly elected president has wasted no time to push to restore macroeconomic stability, and reassure investors. But recent concerns about hidden debts could pose a risk to the debt restructuring process. In South Africa, reports suggest that the authorities are adopting a harder line on state-owned enterprise bailouts, but we think that it will be a case of not all SOEs being created equal.

3 September 2021
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