South African economy stumbles, oil price falls

Q2 GDP figures released in South Africa this week weren’t quite as ugly as we had feared, which has prompted us to revise up our full year growth forecast (to -8.5% from -11.0%). Even so, the country still suffered one of the largest contractions in output in Q2 of any major economy and more timely data suggest that the recovery has since slowed. That’s likely to prompt an interest rate cut at the Reserve Bank's meeting next week. Elsewhere, the renewed fall in oil prices is putting pressure on African producers’ finances, pushing Angola a step closer to default.