South African inflation, Abiy’s next term

Data due next week are likely to show a further rise in inflation in South Africa in May, strengthening the case for the Reserve Bank to tighten monetary policy again. But we think a hike in July will be the last in the cycle. Elsewhere, preliminary results from Ethiopia’s election point to a resounding victory for PM Abiy’s Prosperity Party which, based on a budget speech this week, looks set to run a looser fiscal stance which may exacerbate sovereign debt woes.