SA to struggle to get back on economic feet after July hit

South Africa’s hard activity data for July underscored the severe blow to the retail and manufacturing sectors from violent unrest and tighter virus restrictions. While much of the hit has probably unwound more recently, weak growth momentum increases the risk of a contraction in GDP over Q3 as a whole.
Virag Forizs Emerging Markets Economist
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Africa Economics Weekly

‘BIG’ push in SA, FX distortions in Nigeria, tourism woes

Momentum behind proposals for a basic income grant (BIG) in South Africa appear to be building, suggesting that the authorities are leaning towards providing more fiscal support. Elsewhere, Nigeria’s unorthodox foreign exchange policy seems to be disrupting activity but the chances of policymakers reversing course are very low. Finally, a recent virus wave in the highly-vaccinated island nation of Mauritius has dampened its recovery prospects, but other tourism-dependent economies in Africa will probably fare even worse.

17 September 2021

Africa Economics Update

CBN maintains interest rates and disruptive FX rules

Policymakers in Nigeria kept their benchmark rate on hold at 11.50% at today’s MPC meeting and will probably continue to do so over 2021-23. And the central bank’s insistence on maintaining a strong currency using disruptive foreign exchange rules is likely to come at an increasingly high economic cost.

17 September 2021

Africa Data Response

Nigeria Consumer Prices (Aug.)

The drop in the headline inflation rate in Nigeria, to 17.0% y/y in August was, once again, driven by easing food price pressures, although core inflation also eased. This is likely to reassure policymakers and we expect the benchmark rate to remain unchanged this month and beyond.

15 September 2021

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Africa Data Response

Nigeria Consumer Prices (Aug.)

The drop in the headline inflation rate in Nigeria, to 17.0% y/y in August was, once again, driven by easing food price pressures, although core inflation also eased. This is likely to reassure policymakers and we expect the benchmark rate to remain unchanged this month and beyond.

15 September 2021

Africa Economics Update

Ethiopia: debt risks loom larger with escalating conflict

Ethiopia’s escalating internal conflict has reignited concerns about the country’s public debt position. While debt dynamics may not look that worrisome on the surface, the political situation threatens the country’s otherwise strong economic growth and the currency’s stability – two key assumptions that debt sustainability rests on. A sovereign default is an increasing risk.

8 September 2021

Africa Economics Weekly

Zambia’s new president off to a good start, SOEs in SA

Zambia’s newly elected president has wasted no time to push to restore macroeconomic stability, and reassure investors. But recent concerns about hidden debts could pose a risk to the debt restructuring process. In South Africa, reports suggest that the authorities are adopting a harder line on state-owned enterprise bailouts, but we think that it will be a case of not all SOEs being created equal.

3 September 2021
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