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Inflation edges up and set to soar in June Nigeria’s headline inflation rate rose to a fresh 17-year high of 22.4% y/y and the recent removal of fuel subsidies alongside yesterday’s devaluation of the naira mean that it is likely to surge to more than 30% …
15th June 2023
After dodging recession, economy made decent start to Q2 April’s activity data out of South Africa suggest that, after dodging a technical recession in Q1, the economy made a bright start to the second quarter. But external and domestic headwinds, …
14th June 2023
PMIs point to further falls in manufacturing ahead The fall in the South African manufacturing PMI in May leaves it at a level consistent with modest falls in output in the sector. And the collapse in the future conditions component suggests that things …
1st June 2023
Skirting technical recession, but power cuts threaten stagflation March’s activity data out of South Africa suggest that the economy is likely to have skirted a technical recession, but the outlook is bleak as the intensification of power cuts weighs on …
17th May 2023
Pick-up in headline PMI hiding underlying weakness The rise in South Africa’s manufacturing PMI last month was due to a jump in inventories, while other indicators pointed to further weakness in the sector. The country’s severe energy crisis continued to …
2nd May 2023
South African economy closer to technical recession February’s weak hard activity figures out of South Africa suggest that stronger data from January were a blip and, following a contraction in GDP in Q4, increase the chances that the economy has slipped …
19th April 2023
Latest pick-up in inflation strengthens hawks’ case South Africa’s headline inflation reading for March came in stronger than expected, at 7.1% y/y, and core inflation remains uncomfortably high for policymakers at the Reserve Bank. With persistent …
Contraction in manufacturing production in Q1 on the cards The fall in South Africa’s manufacturing PMI last month paints a downbeat picture of a sector unable to escape from a severe energy crisis. The figures are consistent with manufacturing output …
3rd April 2023
Jump in core inflation seals the deal on a 25bp hike next week The rise in South Africa’s headline inflation rate, to 7.0% y/y, in February may be a sign that the intensification of loadshedding in recent months is fuelling price pressures. So long as …
22nd March 2023
SA economy in less dire straits; Inflation in Nigeria at new 17-year high January’s hard activity figures out of South Africa came in stronger than expected, reducing the chances of a technical recession. But momentum remains extremely weak. Elsewhere, …
15th March 2023
Recovery from Q4 GDP-shocker likely to be muted South Africa’s GDP fell by a sharper-than-expected 1.3% q/q in Q4, and the broad-based weakness in economic activity is unlikely to improve any time soon as severe power cuts and fiscal consolidation …
7th March 2023
Electricity woes put further pressure on economy The sharp fall in South Africa’s manufacturing PMI last month provides further signs that the country’s electricity crisis is taking a heavy toll on the economy. And the jump in the prices component …
1st March 2023
Growth picks up in Q4, but likely to remain weak whoever wins the election Nigeria’s economy recorded a surprisingly large pick-up in GDP growth, to 3.5% y/y, in Q4 but recent disruptions caused by the demonetisation process are likely to have dampened …
22nd February 2023
Weakness spreading beyond industry in SA; Nigeria’s surprise rise in inflation December’s hard activity figures out of South Africa point to a mild contraction in GDP in Q4 and indicate that weakness in the economy is spreading beyond industrial sectors. …
15th February 2023
Easing price pressures to make way to final rate hike Inflation in South Africa continued to decline, to 6.9% y/y in January, but we think that the Reserve Bank will err on the side of delivering a final 25bp rate hike to (7.50%) at the next policy …
Industrial weakness offsetting retail strength November’s hard activity figures out of South Africa were a mixed bag, but we think that weakness in industrial sectors will increasingly dwarf any strength elsewhere especially as power cuts and softening …
18th January 2023
End of monetary tightening not far away as inflation falls Inflation in South Africa came in softer than expected, at 7.2% y/y, in December, and with core inflation ticking down as well, we think that a slowdown in the tightening cycle is nailed on. We …
Dip in inflation to turn CBN’s hawks into minority December inflation data out of Nigeria, at 21.3% y/y, came in below expectations, and provided a first sign that inflation passed its peak. Policymakers are likely to latch onto the fall in inflation and …
16th January 2023
PMI picks up, but manufacturing sector set for tough 2023 South Africa’s manufacturing PMI picked up for a fourth consecutive month, to 53.1, in December but the backdrop of persistent power cuts, tight policy and a global recession means that we think …
6th January 2023
Unabating price pressures to put policymakers in a bind November inflation data out of Nigeria came in stronger than expected, with the headline rate picking up to 21.5% y/y and price pressures increasing in m/m terms as well. Together with our …
15th December 2022
Economy lost momentum at the start of Q4 October’s hard activity data out of South Africa showed the economy’s strong performance in Q3 did not last into Q4. Industrial sectors, in particular, faltered. As headwinds mount, we expect a sharp slowdown. …
14th December 2022
Softer inflation will allow SARB to slow tightening Inflation in South Africa eased a bit more than expected, to 7.4% y/y, in November and there were encouraging signs that core price pressures are fading. The figures will provide room for the Reserve …
Strong rebound, but signs of underlying weakness South Africa’s economy rebounded in Q3, with a 1.6% q/q expansion, but the underlying picture was less rosy as growth was supported by a build-up of inventories; household spending contracted . Persistent …
6th December 2022
South Africa’s manufacturing PMI increased in November, to 52.6, but underlying activity in the sector is likely to remain subdued as the combination of sustained power cuts and fiscal and monetary policy tightening bites. And the pick-up in the prices …
1st December 2022
Marked pick-up in growth unlikely following Q3 slump GDP growth in Nigeria slowed to 2.2% y/y in Q3 as woes in the oil sector intensified and key parts of the non-oil economy, such as agriculture and manufacturing, performed poorly. Even with …
24th November 2022
Surprisingly strong inflation to keep hawks in majority South Africa’s headline inflation rate picked up unexpectedly in October, to 7.6% y/y, and the jump in core inflation will be a particular worry for policymakers. Another 75bp hike in the repo …
23rd November 2022
September’s hard activity data out of South Africa were a mixed bag, but it looks like the economy narrowly avoided another contraction in Q3 (and thus a technical recession). Even so, with headwinds mounting, economic activity is likely to stay subdued …
16th November 2022
Fresh upwards pressures pushing up inflation Data out of Nigeria showing a pick-up in inflation to 21.1% y/y in October offered little sign that price pressures are abating. And that’s before the effects of recent flooding and currency weakness have fully …
15th November 2022
PMI picks up, but outlook remains gloomy South Africa’s manufacturing PMI picked up in October but persistent electricity supply problems, tight fiscal and monetary policy and a worsening external backdrop mean that the economic recovery will continue to …
1st November 2022
August data increases chances of a technical recession August’s hard activity data out of South Africa and more timely indicators point to a small fall in GDP in Q3, marking a technical recession. Even so, we expect the Reserve Bank to stay focused on …
19th October 2022
Inflation ticking down, but monetary policy to remain hawkish While South Africa’s headline rate edged down to 7.5% y/y in September, the surprising strength of core inflation will push policymakers to deliver another 75bp hike in the benchmark interest …
Inflation nearing peak The rise in Nigeria’s headline inflation rate to a 17-year high of 20.8% y/y last month reinforces our view that policymakers will raise the benchmark rate by a further 100bp, to 16.50%, in November. That will likely mark the end of …
17th October 2022
Manufacturing sector struggling to recover from Q2 downturn The drop back in South Africa’s manufacturing PMI in September paints a worrying picture that the sector may have contracted again in Q3. Ongoing electricity supply problems, combined with a …
3rd October 2022
Inflation passed its peak, but monetary policy hawks still hold most sway The fall in inflation in South Africa, to 7.6% y/y in August, marked the first sign that price pressures are turning a corner. But we doubt this will be enough to convince the …
21st September 2022
Inflation surpasses 20% Nigeria’s headline inflation rate surpassed 20% y/y for the first time in 17 years in August and we think that this will prompt the central bank to respond with a 50bp increase to its benchmark interest rate, to 14.50%, later this …
15th September 2022
Economic struggles to continue beyond Q3 July’s hard activity data out of South Africa suggest that the economy started the third quarter on a weak footing. With little momentum, GDP growth is likely to be subdued over the coming quarters. But that is …
14th September 2022
Fall in Q2 GDP pushes economy back below pre-pandemic level South Africa’s economy contracted by 0.7% q/q in Q2 and this is likely to be followed by only modest growth in the coming quarters. The outturn might raise second thoughts at the Reserve Bank …
6th September 2022
Manufacturing sector rebound unlikely to last The rise in South Africa’s manufacturing PMI in August essentially reversed the sharp decline in July on the back of weaker global demand as well as severe power cuts at home. We expect external conditions …
1st September 2022
Bump in growth to be followed by slowdown GDP growth in Nigeria picked up to 3.5% y/y in Q2 as woes in the oil sector eased and the non-oil economy held up well. We expect the drag from the oil sector to diminish further in the coming quarters, but the …
26th August 2022
Uncomfortably high inflation to keep hawks in majority The latest rise in inflation in South Africa to 7.8% y/y in July will raise the pressure on Reserve Bank officials to continue tightening policy aggressively. Even as signs of a faltering economy …
24th August 2022
No escape from a fall in GDP in Q2 The hard activity data out of South Africa for June suggest that the economy contracted by around 1.0% q/q in Q2, and we think that activity will remain weak in the coming quarters too. June hard activity figures …
17th August 2022
Latest jump in inflation to keep CBN in tightening mood Inflation in Nigeria jumped to 19.6% y/y last month and we think that the headline rate will rise a bit further. Policymakers are likely to respond by raising the benchmark interest rate from 14.00% …
15th August 2022
Power crisis dealing heavy blow to manufacturing sector The decline in South Africa’s manufacturing PMI in July points to a large hit to activity from weaker global demand as well as severe power cuts at home. It will probably take some time before …
1st August 2022
Policymakers in a bind after another jump in inflation The jump in inflation in South Africa to 7.4% y/y in June keeps a 75bp interest rate hike on the table at the SARB’s meeting tomorrow. But with policymakers clearly concerned about the weakness of the …
20th July 2022
Q2 contraction on the cards The disappointing batch of South African activity data for May suggests that the economy is on course for a mild fall in GDP in the second quarter. The hard activity figures released this week by StatsSA made for pretty grim …
14th July 2022
Manufacturing sector rebound slowing The drop in South Africa’s manufacturing PMI in June signals that the rebound from the floods that hit activity in April lost steam at the end of Q2. The sector was probably a considerable drag on headline GDP growth …
1st July 2022
Inflation jumps, now a choice between 50bp and 75bp hike next month The rise in inflation in South Africa to an above-target 6.5% y/y in May is likely to shift the debate to a choice between a 50bp and a 75bp hike to interest rates at July’s MPC meeting. …
22nd June 2022
Weak recovery to follow hit to SA industry, jump in Nigerian inflation South Africa’s activity data for April showed that flooding in a key province and renewed power cuts dealt a big blow to industrial sectors, while retail sales held up well. GDP …
15th June 2022
Strong Q1 to lift growth in 2022 South Africa posted stronger-than-expected GDP growth of 1.9% q/q in Q1 and, while the economy is unlikely to sustain such a robust performance over the coming quarters, we have revised up our GDP growth forecast for this …
7th June 2022
Partial rebound underway in manufacturing sector The rebound in South Africa’s manufacturing PMI last month reversed some of its losses in April, but the recovery in the manufacturing sector is on shaky footings given ongoing power cuts. And price …
1st June 2022
