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Our EM interest rate forecasts generally lie on the dovish side. But, in particular, we think that investors are underestimating the scale of interest rate cuts that will be delivered in Brazil and South Africa over the next 18 months or so. In contrast, …
20th August 2025
Many central banks across Sub-Saharan Africa have cut interest rates over the past year or so and Nigeria will soon join the rate-cutting club. With inflation low or falling in most countries, we generally expect more monetary easing than the consensus by …
18th August 2025
June’s activity data suggest that, after a sluggish start to the year, South Africa’s economic recovery picked up in the second quarter, with GDP likely to have expanded by 0.8-1.0% q/q. And we think tailwinds from low inflation, looser monetary policy …
13th August 2025
President Trump’s tariff salvo aimed at some of the BRICS economies has led to growing efforts within the bloc to present a united front in the face of US protectionism. But divisions between the members will ultimately limit how far political and …
12th August 2025
Côte d’Ivoire’s economic fortunes appear good, and we expect growth to accelerate, underpinned by strong cocoa, oil and gold exports. However, the country’s sizeable sovereign debt servicing costs and reliance on external financing remain key risks, …
6th August 2025
President Trump’s latest flurry of tariffs implies that the US effective tariff rate will rise to about 17%, from 2.3% last year. That is a little higher than we assumed and so presents modest downside risks to our forecast for global GDP growth and a …
1st August 2025
The South African Reserve Bank’s decision to continue with its interest easing cycle today, with a 25bp cut to 7.00% was unsurprising, and the highlight of the meeting was Governor Kganyago’s announcement that the SARB will informally target the bottom of …
31st July 2025
US tariffs have hit South Africa’s auto sector hard, but the sector also faces deeper structural challenges, including weaker demand growth in key export markets and competition from Chinese producers. All of this reinforces the idea that structural …
23rd July 2025
The rebasing exercise by Nigeria’s statistics office means that the economy is now estimated to be more than 30% larger than previously thought. While the national accounts data now better reflect the size and composition of the economy, it doesn’t change …
22nd July 2025
May’s activity figures suggest that South Africa’s economic recovery remains slow and bumpy. While industry appears to have fared better recently, consumer-facing sectors appear to be losing steam. For now, though, tailwinds from looser monetary policy, …
16th July 2025
Protests have erupted again in Kenya recently, bringing violence and instability, and highlighting that the government lacks the political capital to repair the fragile fiscal position. With international borrowing costs prohibitively high, financing …
3rd July 2025
April’s activity data suggest that the weakness of South Africa’s economy in the first quarter of the year – in which GDP expanded by a measly 0.1% q/q – carried over into the start of Q2. Industry continued to struggle and the retail sector lost some …
18th June 2025
The overnight strikes by Israel on Iran mark a major escalation in the conflict in the region and, with the oil market tighter than it was a few months ago, the risks to oil prices look more balanced than we’d previously thought (rather than skewed to the …
13th June 2025
The South African Reserve bank resumed its interest rate easing cycle today, with a 25bp cut to 7.25%, and there was a marked dovish shift among the MPC, suggesting – as we have long thought – that the repo rate will decline further over this year. The …
29th May 2025
In this Update, we answer several key questions about how the US Court of International Trade (CIT) tariff ruling might affect the US and other economies. The outlook may now rest on the decision of the Republican-stacked Supreme Court. The upside risks …
We will be hosting a Drop-In at 3pm BST to discuss the key takeaways from the Budget and to answer your questions. Register here . South Africa’s Finance Minister Enoch Godongwana’s third attempt at delivering the 2025 Budget should have enough support …
21st May 2025
Nigeria’s long-running security challenges have brought obvious human costs, and they have also contributed to the economy’s woes by hurting output in the agriculture and oil sectors, weakening demand, and putting off investment. President Tinubu’s …
15th May 2025
The recent climbdown has left the effective US tariff rate on the rest of the world at around 15% as opposed to the 27% which was threatened at the height of this year’s trade war. While this is still the highest since the 1930s, it is unlikely to cause a …
13th May 2025
Global Trade Stress Monitor …
The US and China have each suspended for 90 days all but 10% of their Liberation Day tariffs and cancelled other retaliatory tariffs. This is a substantial de-escalation. However, the US still has much higher tariffs on China than on other countries and …
12th May 2025
The prospect of a flood of low-cost Chinese exports to African shores may help those economies suffering from high inflation but it risks undermining the growth of domestic industry. Governments in the likes of Nigeria, with a history of employing …
1st May 2025
The February activity figures out of South Africa showed that the economy was struggling even before the added headwind from US import tariffs. But while there are downside risks to growth, we still believe a combination of easing loadshedding and …
16th April 2025
President Trump’s trade war has created material downside risks for the global economy. Our forecasts assume that tariffs on most countries outside China will stay at 10% and retaliation by other governments will be moderate. In this scenario, global GDP …
10th April 2025
The direct trade impact of US import tariffs on Africa is likely to be limited, but there could be more harmful indirect effects via weaker growth in other key trading partners, lower commodity prices and/or a more challenging external financing …
Some oil producers, such as the UAE and Kuwait, should be able to easily weather a period of low oil prices. But a sustained decline in prices would be a bigger challenge for Saudi Arabia, which would need to tighten fiscal policy, and producers with weak …
9th April 2025
President Trump’s reciprocal tariffs are particularly high on some of the lowest-income EMs, which are also among the most vulnerable to the suspension of US aid flows. That raises the risk of balance of payments strains, and also provides an opening for …
8th April 2025
We hosted two online Drop-In sessions on 3 rd April to discuss the fallout from President Trump’s Liberation Day tariff announcement. (See a recording here .) This Update contains answers to some of the questions that we received and links to several more …
3rd April 2025
In this Update, we answer several key questions about how the announced 25% tariffs on US imports of autos and parts might affect the global economy and the US itself. Mexico, Slovakia and Korea are most exposed with up to 1.6% of GDP at risk. But the …
27th March 2025
The South African Reserve Bank left its repo rate on hold at 7.50% today, but a minority of MPC members voted for a cut and we do not think the easing cycle is over. If inflation continues to surprise on the downside as we expect and there is clarity on …
20th March 2025
South Africa’s hard activity data for January show that the retail sector is steaming ahead and driving the recovery. We think the lagging industrial sector will start to catch up on the back of monetary easing and improved electricity and logistical …
19th March 2025
Lingering fiscal risks in South Africa, alongside the challenging global backdrop, prompt us to expect a dim outlook for the country’s bonds, equities and the rand over the rest of this year. The negative reaction in markets to rumours that South Africa’s …
18th March 2025
South Africa’s 2025 Budget speech was (finally) delivered but it’s not at all clear whether the plans will be approved given the DA’s opposition to the proposed VAT hike. We think there is more horse trading to be done, with Finance Minister Godongwana …
12th March 2025
Kenya’s 2025/26 budget has set out ambitious revenue-raising plans that we think will be tough to achieve and some fiscal slippage is inevitable. The result is that, in the absence of further fiscal consolidation efforts, Kenya’s public debt-to-GDP ratio …
The events of the past two weeks have called into question whether the US is severing ties not just with adversaries such as China but also allies, including Canada, Mexico and the European Union. This would radically alter the shape of the fractured …
4th March 2025
The threat of lower oil prices and the Angolan government’s apparent reluctance to push through (further) fiscal consolidation measures has raised the risk that it will be the next African sovereign to default on its debt. If that transpires, large debts …
27th February 2025
South Africa’s hard activity data for December were generally disappointing but it’s still likely that the economy rebounded in Q4 of last year following a surprise contraction in Q3. We expect the recovery to continue this year and have pencilled in …
19th February 2025
Nigeria’s headline inflation rate came in at 24.5% y/y in January after the national statistics office made substantial methodological changes and, while we do not yet have the full information to predict the exact path for inflation going forward, fading …
18th February 2025
Mozambique’s post-election woes are mounting after another reported delay to one of its key natural gas projects. And this has led to increasing talk that the government may seek to restructure its debt pile. If sovereign default was to occur, the lesson …
6th February 2025
The threat by President Trump to cut funding to South Africa due to the controversial land expropriation bill will (if implemented) have limited direct economic effects. The bigger concern is that the threat will create tensions within the ruling …
3rd February 2025
The South African Reserve Bank decision to cut its repo rate by 25bp, to 7.50%, was widely expected but Governor Kganyago was more hawkish than anticipated, citing concern about US tariff threats and the prospects of the rand weakening further. On the …
30th January 2025
South Africa’s activity data for November points to a strong end to last year, underpinned by the mining and retail sectors. We think GDP will expand by an above-consensus 2.3% in 2025. The retail sales data released today showed that the sector continued …
22nd January 2025
Six months since its formation, South Africa’s Government of National Unity (GNU) has fostered a lot of goodwill in the market. Loadshedding is seemingly a thing of the past, logistics constraints have eased, and the fiscal position has improved. But …
16th January 2025
The Cold War was defined by geopolitical blocs – the Soviet or Eastern bloc against the Western bloc. Geopolitics retreated with the collapse of the Soviet Union. The period from the early-1990s to the early-2010s was instead an era of globalisation: most …
7th January 2025
Inflation in South Africa is now running at extremely low rates by historic standards. While we think it will edge up from here, the extent of spare capacity in the economy and tight fiscal stance mean inflation will remain lower than consensus …
13th December 2024
The main presidential candidates and their parties in Ghana’s upcoming election appear to be committed to restoring fiscal discipline and getting inflation under control. That said, the opposition NDC, which currently appears on course to take power, is …
3rd December 2024
We held an online session on US import tariffs on 26th November. (See a recording here ). In this Update we answer the questions we were most asked. What are Trump’s motives for threatening tariffs and will he follow through? Trump has spoken about using …
29th November 2024
The South African Reserve Bank’s decision to lower its repo rate by 25bp to 7.75% was not a surprise and Governor Kganyago sounded more optimistic that inflation is under control. Lingering concerns about the vulnerability of the rand and the growing …
21st November 2024
US President-elect Trump’s protectionist rhetoric may mean that African sovereigns are contemplating the loss of preferential trade access to the US via the AGOA scheme. We think the overall impact from such a move would be limited, but specific sectors …
South Africa’s activity data for September points to a subdued end to Q3, but we think this softer patch will be short-lived as low inflation and the SARB’s easing cycle provide some support to demand. That said, tight fiscal policy will prevent the …
20th November 2024
US President-elect Donald Trump’s plans to curb immigration and undertake a mass deportation of undocumented migrants could boost labour supply in countries that are the source of migrants. But there could be social and fiscal costs, as well as lower …
18th November 2024
