In-Depth Analysis
eSwatini
Landlocked eSwatini is ruled by Africa’s last absolute monarch and most of its people are dependent on subsistence agriculture. Unwarranted state spending blemishes the country’s reputation, along with its foreign investment appeal. Key macroeconomic indicators have underperformed in recent years, mainly due to the widening fiscal deficit. While disruptive political change seems certain, it does not look imminent.
The economy already found itself in a technical recession in Q1 2020, before the dire impact of Covid-19. Nevertheless, the contraction in Q2 was less severe then we feared, with real GDP declining by 8.2% y-o-y, compared to our previously projected -17.4% y-o-y. Given the dependence of eSwatini on the South African economy for trade, remittances, and fiscal revenues in the form of Sacu receipts, the economic growth outlook remains uncertain. The recent resurgence of Covid-19 cases in South Africa could spell harder lockdowns over the coming months, which would surely weigh heavily on the landlocked kingdom’s economy. (Source: eSwatini Quarterly Update, published December 2020)
Macroeconomic Data
(2020)
|
Fiscal Balance (as a % of GDP) |
-9.6 |
|
Consumer Price Index (% change y-o-y, avg) |
3.8 |
|
Current Account Balance (as a % of GDP) |
5.3 |
|
Real GDP (annual % change) |
-6.4 |
|
GDP per Capita, US$ |
3,279.7 |
|
Import Cover (months) |
4.8 |
|
Population, million |
1.2 |
| Total External Debt (as a % of GDP) |
21.1 |