SA trade & budget data, SSA activity holds up

Trade and budget data released this week suggest that South Africa headed into the energy price shock in decent shape. But we are concerned about the risks that a longer war could pose to the fiscal position and inflation. Meanwhile, March PMI readings for South Africa and Nigeria held up relatively well despite the war. Inflationary pressures are building though, and while we do not expect interest rate hikes in either economy, we are worried that those economies with underlying vulnerabilities (e.g. Kenya) may have to tighten policy.