South African state of COVID-affairs, cocoa wars

South African President Cyril Ramaphosa’s speech to the nation last night suggests that, for now at least, the government is continuing to prioritise the economy over battling a second wave of COVID-19. Meanwhile, West African cocoa producers and major chocolatiers are locked in a war of words that threatens to upend the cocoa market.
Jason Tuvey Senior Emerging Markets Economist
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Africa Economics Weekly

Lockdown lessons from SA, influx of jabs and cash?

South African policymakers appear to be reluctant to impose restrictions in the face of the threat from the Omicron variant, but their hand could be forced if the health system comes under strain. In previous waves, measures have been tightened when hospitalisations have breached 5,000. While we’re some way off that, the figures are on an upwards path. Meanwhile, ambitious pledges by Africa’s key development partners including China and the EU on vaccines and infrastructure investment will lift the region’s longer-term economic prospects. Finally, even with the IMF on board, restoring Zambia’s debt sustainability will remain challenging.

3 December 2021

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

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Emerging Europe Economics Update

Turkey’s inflation risks mount, CBRT to delay rate cuts

Turkish inflation hit a two-year high in June and recent domestic energy price hikes will cause it to rise even further over the next couple of months. High inflation and signs of a quick recovery from May’s lockdown mean that the central bank will probably delay the start of its easing cycle until later this year. We now expect the one-week repo rate to be lowered to 17.00% by end-2021 (previously 14.00%).

7 July 2021

Emerging Europe Data Response

Turkey Consumer Prices (Jun.)

The fresh rise in Turkey’s headline inflation rate to 17.5% y/y in June, coupled with signs of a strong rebound in activity after May’s three-week lockdown, means that an interest rate cut in the next couple of months is increasingly unlikely. An easing cycle is now more likely to commence later this year when inflation looks set to fall sharply.

5 July 2021

Emerging Europe Economics Weekly

Turkey dollarisation, Ukraine-IMF, Russia & Poland rates

Turkey’s central bank took steps this week to tackle deposit dollarisation in the banking sector, although these efforts will fail to make headway in the absence of a stronger commitment to rein in high inflation. Meanwhile, Ukraine’s government still has work to do to secure the next tranche of its IMF loan, but the economy can muddle through without help from the Fund for some time. Finally, other developments this week suggest that Poland’s central bank may stick to its recent dovish rhetoric while Russia looks like it could accelerate the pace of monetary tightening.

2 July 2021
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