In-Depth Analysis
South Africa
The Rainbow Nation has lost its position as Africa’s top economy and is no longer seen as a default gateway into the continent. Political struggles, exacerbated by lower export receipts resulting from a softer iron ore price, restrain economic growth.
A weaker than expected outcome for Q2, confirming that the economy slipped into recession, facilitated a further downward revision to our GDP growth forecasts for 2018. Earlier this year, we raised our forecast for 2018-19 on expectations of more market-oriented policies and less corruption under newly elected President Cyril Ramaphosa’s leadership, but it has become clear that optimism was premature and that the challenges facing the economy will take longer to address in a way that can meaningfully lift the economic growth rate, while the upcoming general election in 2019 is also clouding the vision of the ruling African National Congress (ANC), particularly relating to policy issues. We have revised our GDP growth forecasts for 2018 downwards to only 0.7% (down from 1.6% forecast at the beginning of the year) and slightly higher to 2.1% in 2019 (from 1.8% beginning of the year) given the lower base vs. a 1.3% expansion in 2017. (Source: South Africa Annual Country Profile, published October 2018)
Macroeconomic Data
(2017)
|
Fiscal Balance (as a % of GDP) |
-3.4 |
|
Consumer Price Index (% change y-o-y, avg) |
5.3 |
|
Current Account Balance (as a % of GDP) |
-2.4 |
|
Real GDP (annual % change) |
1.3 |
|
GDP per Capita, US$ |
6,151 |
|
Import Cover (months) |
6.2 |
|
Population, million |
56.8 |
| Total External Debt (as a % of GDP) |
49.4 |