Weak demand holding back S. Africa’s economy

The fading drag from load-shedding was widely expected to allow a recovery in South Africa’s economy this year, but this hasn’t materialised. We think that weak demand is to blame, itself a symptom of tight fiscal and monetary policy and a challenging global backdrop. Both may ease somewhat, providing a tailwind for growth to accelerate in the near-term, but structural reforms will be needed for South Africa to record growth beyond 2%.