Africa

South Africa

Current account risks building in Em. Europe & Lat Am

The shift to current account surpluses in Indonesia and South Africa suggest that these economies may be better placed to weather any fallout from rising US interest rates than in the past. But current account deficits have become an increasing cause for concern in parts of Emerging Europe (Hungary, Poland and Romania) and Latin America (Colombia and Chile). Drop-In: Join Chief Emerging Markets Economist William Jackson and Jason Tuvey, head of our Turkey coverage, shortly after this Thursday’s CBRT meeting for a discussion about Jason’s new report on economic policy-making in Turkey, the impact of the lira’s collapse and brewing macro risks this Thursday 20th January at 09:00 ET/14:00 GMT. Register here.

18 January 2022

ANC leadership contest, Ghana’s debt, Ethiopia’s conflict

Leftist factions of South Africa’s ruling ANC already appear to be gearing up to take on President Cyril Ramaphosa in December’s leadership election and this is likely to push fiscal policy in a looser direction, worsening the country’s debt problems. Debt concerns are also building in Ghana and remain elevated in Ethiopia as well, even though there are signs that the internal conflict is abating.

14 January 2022

Omicron sweeps across the emerging world

The Omicron variant of COVID-19 is causing new virus cases to surge in the emerging world. Many EMs are reporting record daily cases or that new infections are rising sharply. South Africa’s experience offers some hope – cases are now falling sharply there and it looks like the economic fallout was limited. Elsewhere, most EM governments are following South Africa’s playbook by imposing limited (if any) containment measures, although China is a key exception. And given weakness in testing capacity and large informal sectors in most EMs, workplace absenteeism is unlikely to be as economically disruptive as in DMs.

14 January 2022
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A look ahead to the key EM political events of 2022

In this Update, we take a look at the key political events that are scheduled across the emerging world over the coming year and outline their possible implications for economic policy and growth. Drop-In: Neil Shearing will host an online panel of our senior economists to answer your questions and update on macro and markets this Thursday, 13th January (11:00 ET/16:00 GMT). Register for the latest on everything from Omicron to the Fed to our key calls for 2022. Registration here.

What to expect in Sub-Saharan Africa in 2022

Sub-Saharan Africa will remain a laggard in the global recovery. The weak economic backdrop means that South Africa’s government is unlikely to stick to its austerity plans and the debt ratio will rise more quickly than most anticipate. Debt risks are also likely to build in other parts of the region. Meanwhile, Nigerian officials will probably double down on their unorthodox policies. Drop-In: Neil Shearing will host an online panel of our senior economists to answer your questions and update on macro and markets this Thursday, 13th January (11:00 ET/16:00 GMT). Register for the latest on everything from Omicron to the Fed to our key calls for 2022. Registration here.

SA experience offering Omicron hope? Nigeria’s budget

Evidence is growing that South Africa’s Omicron-driven virus outbreak has been brief and not as economically damaging as previous waves. This is a promising omen for other economies in Sub-Saharan Africa where COVID-19 cases have also shot up. Meanwhile, in Nigeria, ambitious 2022 budget plans that were approved late last year will – like previous ones – probably miss the mark.

The latest on South Africa’s Omicron experience

The recent sharp fall in virus cases in South Africa provides an early encouraging sign that Omicron-driven outbreaks may run their course relatively quickly. In South Africa’s case, the health system has come under much less pressure than it did during the last (Delta) wave, allowing the government to maintain light-touch restrictions. As a result, it looks like the economic hit will be modest and short lived.

Virus waves across SSA, SARB tightening cycle

After a week filled with central banks around the globe pivoting in a more hawkish direction, we have now pencilled more hikes into our interest rate profile for South Africa (but only after a pause in the tightening cycle in January due to the Omicron wave). At this point, the authorities there have still not moved to tighten virus containment measures. The same applies elsewhere in the region, even though COVID-19 cases have started to pick up too.
– This will be the last Economics Weekly for 2021. The next Weekly will be sent on Friday 7th Jan. 2022 –

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