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SARB will continue to tighten slowly

South Africa’s headline inflation rate will stay close to the upper bound of the central bank’s 3-6% target range in the coming months before falling sharply in the second half of the year. Some MPC members are in a hawkish mood, but we think that interest rates will be raised more slowly than investors expect.
Jason Tuvey Senior Emerging Markets Economist
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Africa Economics Update

Ethiopia: Unlikely to replicate exceptional growth again

Ethiopia has been grappling with the fallout from its internal conflict and severe drought which, coming alongside spillovers from the war in Ukraine, will result in much weaker growth in the coming years and a sovereign debt restructuring is likely. Over the medium-term, we're doubtful that the government will be able to push through its ambitious reform agenda. Ethiopia’s growth miracle, in which the economy grew at rates of 8-12%, has come to an end.

10 August 2022

Africa Economics Weekly

Zambia’s creditors pledge debt relief, Kenya’s elections

News that Zambia’s official creditors agreed to provide debt relief is certainly encouraging and will unlock IMF funding. But the terms of the deal remain unknown, leaving in doubt that the country’s public debt will return to a sustainable path. Meanwhile, investors are on tenterhooks just as much as Kenyan voters ahead of Tuesday’s elections that are shaping up to be a close race. Oil and the Gulf Drop-In (9th Aug): What’s the outlook for oil prices and what does that mean for Gulf economic outperformance? Join economists from our Commodities and Emerging Markets teams for this 20-minute briefing. Register now.

5 August 2022

Africa Economics Update

Kenya: elections no cure for economic woes

Kenya’s general election scheduled for Tuesday is set against a challenging economic backdrop, and no matter the winner, the country’s outlook is likely to remain overshadowed by large macroeconomic imbalances and high public debt risks. Oil and the Gulf Drop-In (9th Aug): What’s the outlook for oil prices and what does that mean for Gulf economic outperformance? Join economists from our Commodities and Emerging Markets teams for this 20-minute briefing. Register now.

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More from Jason Tuvey

Emerging Europe Data Response

Turkey Industrial Production & Retail Sales (Feb.)

Turkey’s activity data for February point to a growing divergence between industry, which is being supported by a weak lira, and retail sales which continues to struggle in face of the surge in inflation. On balance, we think that the economy suffered a contraction in Q1 and, with higher global commodity prices adding further fuel to inflation, we expect below-consensus GDP growth of just 0.3% this year.

12 April 2022

Africa Economics Weekly

Virus restrictions eased, Kenya’s fleeting budget

Governments across Sub-Saharan Africa have scaled back COVID-19 restrictions in recent weeks and, despite low vaccination coverage, it seems the virus will be less disruptive to activity going forward. But the pandemic will leave an economic legacy, notably in the form of higher government debt. Meanwhile, Kenya’s budget largely stuck to fiscal consolidation but upcoming elections mean that the shelf life of these budget plans will be short.

8 April 2022

Africa Economics Update

Ghana’s policy tightening to hold back recovery

Ghana’s economic recovery will remain sluggish over the next couple of years as policy is tightened in a bid to shore up the public finances and tackle high inflation. The risk of an imminent sovereign default appears low but, if fiscal consolidation efforts continue to fall short, Ghana will eventually need to turn to the IMF for financial support and seek a debt restructuring.

8 April 2022
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