South Africa
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May 10, 2024
Asset Allocation 2024: Tricky Seven Months Remaining
May 10, 2024 1:06 PM UTC
Fed easing expectations for 2025 and 2026 can shift from a terminal 4% Fed Funds rate towards 3%, as the U.S. economy slows due to lagged tightening effects. Combined with Fed easing starting in September this should mean a consistent decline in 2yr yields. However, 10yr U.S. Treasury yields wil
May 03, 2024
EMFX: Diverging On Domestic Forces Not Less Fed Easing Hopes
May 3, 2024 10:45 AM UTC
While U.S. economic developments, plus Fed policy prospects, will be important in terms of EM currency developments, domestic politics and fundamentals will also be decisive. These can keep the South Africa Rand volatile in the remainder of 2024, given the risk of a coalition government and African
May 01, 2024
South Africa’s Fiscal Outlook Under Spotlights as the Elections Are Approaching
May 1, 2024 6:45 PM UTC
Bottom line: South Africa policy makers remain concerned about government debt trajectory, large domestic and international financing needs and elevated country risk premium before fast-approaching elections on May 29. We think South Africa’s general government fiscal balance and debt trajectory w
April 26, 2024
Headwinds To Long-term Global Growth
April 26, 2024 9:30 AM UTC
Bottom line: While much focus is on the cyclical economic position to determine 2024 monetary policy prospects, the 2025-28 structural growth trajectory differs to the pre 2020 GDP trajectory for major economies. While global fragmentation has a role to play, aging populations are already having a
April 24, 2024
Sticky Inflation Causes Concerns over the Horizon
April 24, 2024 9:26 AM UTC
Bottom line: According to the Monetary Policy Review Report by the South African Reserve Bank (SARB) on April 23, the risk of higher inflation still remains and inflation returning to the midpoint of the target band is only expected in the last quarter of 2025. SARB highlighted in its report that ma
April 19, 2024
Recent Polls in South Africa: ANC’s Popularity Continues to Decline
April 19, 2024 1:14 PM UTC
Bottom line: We continue to foresee two possible outcomes of South African presidential elections on May 29, either an African National Congress (ANC) win or a coalition government. According to recent polls, ANC is at the serious risk of losing its majority dipping below 50%, even as low as 37% acc
April 17, 2024
South Africa’s Inflation Softened to 5.3% in March
April 17, 2024 11:38 AM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on April 17, the inflation softened to 5.3% YoY in March from a four-month high of 5.6% YoY due to lower food and non-alcoholic beverages (NAB), alcoholic beverages & tobacco, transporta
April 03, 2024
April 02, 2024
Asset Allocation: Pausing for Breath
April 2, 2024 9:00 AM UTC
Into Q2, data and policy (actual and perceived) will dominate DM markets. The ECB will likely take the spotlight with a 25bps cut on June 7, as the Fed face a better growth/more fiscal policy expansion and a tighter labor market than the EZ but also with a better productivity backdrop and outlook to
March 27, 2024
Beware of Inflation: SARB Held the Key Rate Stable at 8.25%
March 27, 2024 3:26 PM UTC
Bottom line: As widely expected, South African Reserve Bank (SARB) kept the key rate constant at 8.25% on March 27. It appears the decision targeted to anchor inflation expectations around the target midpoint, and enhance confidence in achieving the inflation goal as SARB signalled that its fight to
March 26, 2024
EM FX Outlook: Domestic Drivers Key
March 26, 2024 9:01 AM UTC
In terms of spot EM FX projections domestic drivers remain critical, with a desire to avoid appreciation versus the USD for some countries. Fed easing in H2 2024 should however help EMFX more broadly and allow some recovery in spot rates (e.g. Indonesian Rupiah (IDR), South African Rand (ZAR)
March 25, 2024
EMEA Outlook: Elections Set the Scene in Q2
March 25, 2024 2:00 PM UTC
· Unlike South Africa and Russia, Turkiye continued with tightening monetary policy in Q1 due to stubborn inflation, pressure on FX and reserves. Meanwhile, Russia and South Africa halted their tightening cycles as of 2024 and will likely start cutting interest rates in Q3 depending on how
March 20, 2024
South Africa’s Inflation Hits 4-Months High in February
March 20, 2024 1:37 PM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on March 20, the inflation jumped to 5.6% YoY in February due to higher housing & utilities, miscellaneous goods & services, food and non-alcoholic beverages and transport prices, couple
March 05, 2024
South Africa’s Economy Expanded by a Moderate 0.1% in Q4
March 5, 2024 2:30 PM UTC
Bottom line: As we correctly predicted, South African economy grew by 0.6% YoY in 2023, and by a moderate 0.1% QoQ in Q4. According to Department of Statistics of South Africa’s (Stats SA) announcement on March 5, the supply side of the economy was largely fuelled by the manufacturing, transporta
February 27, 2024
South Africa: Two Major Scenarios for Post-Elections
February 27, 2024 9:00 AM UTC
Bottom line: We foresee two possible outcomes of South African presidential elections on May 29, either a African National Congress (ANC) win or a coalition government. It appears ANC is at the risk of losing its majority as the recent polls suggest support for the ANC has dipped below 50%. Unless s
February 22, 2024
EMFX: Carry and Domestic Fundamentals Rather Than the USD
February 22, 2024 10:00 AM UTC
Bottom Line: Most major EMFX currencies have performed better than the Euro or the Japanese Yen against the USD in 2024 (Figure 1). This is due to carry trades in Latam, but elsewhere reflects global equity love on Indian equities or domestic fundamentals. This resilience for Brazilian Real/Indi
February 21, 2024
South Africa’s Inflation Started 2024 with an Uptick
February 21, 2024 1:16 PM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on February 21, the inflation jumped to 5.3% YoY in January due to higher fuel and food prices, after declining two consecutive months. Other key contributors to the inflation were relat
January 29, 2024
South Africa: Structural Issues to Dominate Long Term Growth
January 29, 2024 9:00 AM UTC
Bottom line: We expect 1.3-1.5% GDP growth in South Africa in the 2025-2030 period. We are concerned with the structural problems affecting economic dynamics negatively, including loadshedding, transportation bottlenecks, and shrinking trade surplus. Despite structural problems; growing population,
January 25, 2024
SARB Held the Key Rate Stable at 8.25% on January 25
January 25, 2024 2:02 PM UTC
Bottom line: As widely expected, South African Reserve Bank (SARB) kept the key rate at 8.25% on January 25, given recent fall in inflation, coupled with relatively less power cuts (loadshedding), a stable Rand (ZAR) and softer global oil prices since December. It appears the decision targeted to a
January 24, 2024
South Africa’s Inflation Ended 2023 with a Promising Slow Down
January 24, 2024 1:29 PM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on January 24, the downward trend in the inflation continued in December with a 5.1% Yr/Yr reading, given slowing fuel prices and food prices, relatively less power cuts (loadshedding) an
January 19, 2024
South Africa’s Inflation is Expected to Further Slow Down in December
January 19, 2024 1:07 PM UTC
Bottom Line: After inflation decreased to 5.5% in November, we now foresee that the downward trend will continue in December and inflation will further slow down to 5.2% Yr/Yr given relatively less power cuts (loadshedding) and a stable Rand (ZAR) in December, coupled with dipped global oil prices.
January 18, 2024
SARB to Hold the Key Rate Stable on January 25
January 18, 2024 1:57 PM UTC
Bottom line: South African Reserve Bank (SARB) is likely to keep the key rate at 8.25% at the upcoming meeting on January 25, given recent fall in inflation, relatively less power cuts (loadshedding) and a stable Rand (ZAR) since December.
January 17, 2024
January 11, 2024
Webinar Recording December Outlook: Rate Cuts Into 2024
January 11, 2024 8:22 AM UTC
You can now access the webinar for the December Outlook here.
To read the individual chapters please see the weblink below.
Outlook Overview: Rate Cuts Into 2024 (here)
U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture (here)
LatAm Outlook: Diverging Paths in 2024 (here)
China Outloo
January 08, 2024
Charting our Views December Outlook
January 8, 2024 9:05 AM UTC
Outlook Overview: Rate Cuts Into 2024 (here)
Economic Scenarios
U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture (here)
LatAm Outlook: Diverging Paths in 2024 (here)
Brazil Policy Rate and CPI Inflation (YoY, %)
China Outlook: Headwinds To China Growth (here)
Japan Outlook: Normalizing
January 02, 2024
December Outlook: Rate Cuts Into 2024
January 2, 2024 9:53 AM UTC
Outlook Overview: Rate Cuts Into 2024 (here)
U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture (here)
LatAm Outlook: Diverging Paths in 2024 (here)
China Outlook: Headwinds To China Growth (here)
Japan Outlook: Normalizing Monetary Policy Soon (here)
Asia/Pacific (ex-China/Japan) Outlook:
December 22, 2023
South Africa’s Load Shedding Remained a Strong Headwind in 2023
December 22, 2023 8:46 PM UTC
Figure 1: System Hourly Demand & Available Capacity, December 15- December 21
Source: Eskom
(Note: When we compare hourly RSA contracted demand against available capacity to check what the amount of surplus/shortfall was in the past week; we see that available capacity could not match with the tot
December 19, 2023
EM FX Outlook: USD Decline v Inflation Differentials
December 19, 2023 9:59 AM UTC
· In spot terms, we see the Indonesian Rupiah (IDR) and Malaysian Ringgit (MYR) rising against the USD as Fed rate cuts narrow interest rate differentials and a move away from an overvalued USD occurs. Brazilian Real (BRL) and Mexican Peso (MXN) will likely be stable against the USD
December 18, 2023
Outlook Overview: Rate Cuts Into 2024
December 18, 2023 3:42 PM UTC
· Uncertainty still prevails around this central view. The impact of lagged monetary tightening could be greater than our estimates and deliver mild recessions in some DM countries. We also feel that the disinflationary process could be stronger and this would help bring inflation back
EMEA Outlook: Inflationary Pressures Remain Strong
December 18, 2023 10:01 AM UTC
Our Forecasts
Source: Continuum Economics
Risks to Our Views
Source: Continuum Economics
EMEA Dynamics: Inflationary Concerns Remain High
EMEA economies continue to be squeezed by macroeconomic problems such as elevated inflation and financial pressures. We think country specific factors, geopolitics,
December 13, 2023
Softer Fuel and Transportation Prices Helped South Africa’s Inflation Decelerate in November
December 13, 2023 1:43 PM UTC
Figure 1: CPI Inflation Rate (%, YoY), November 2021 – November 2023
Source: Datastream
South African inflation fell to 5.5% in November Yr/Yr partly driven by a monthly decrease of 5.5% in the fuel price index leading to the annual rate for fuel lower to 1.8% in November from 11.2% in October. In a
November 24, 2023
SARB Holds Key Rate at 8.25% at Third Straight MPC
November 24, 2023 10:11 AM UTC
Figure 1: CPI Inflation Rate, October 2021 – October 2023
Source: Datastream
Under surging inflationary concerns, SARB decided to keep the repo rate at 8.25% on November 23 MPC. While the hold was widely expected, high inflation numbers on November 22 did raise some eyebrows. Despite this, it appe
November 22, 2023
The Bells Are Tolling as the Spiking Cycle Continues: South Africa’s Inflation Jumped to 5.9% in October
November 22, 2023 3:48 PM UTC
Figure 1: CPI Inflation Rate, October 2021 – October 2023
Source: Datastream
Price increases in food and fuel were remarkable last month, which directly hit the consumers purchasing power. Inflation for food and non-alcoholic beverages accelerated for a second consecutive month, rising to 8.7% in O
November 16, 2023
Long-term Forecasts to download in Excel
November 16, 2023 10:38 AM UTC
We present our annual forecasts that go out to 2030 for GDP Growth, Inflation, and Monetary Policy and to 2028 for Exchange Rates. The file contains five sheets: a Country Coverage summary page and a sheet for each of the four indicators.
The forecasts are consistent with the Long-term Forecasts: DM
Long-term Forecasts: DM Policy Easing
November 16, 2023 8:44 AM UTC
The Continuum Economics research team has spent much of the last month researching, reviewing and debating our long-term GDP, CPI inflation and central bank policy rate forecasts for 2025-30. Alongside a reassessment of long-term factors such as productivity and demographics, we have examined the la
November 14, 2023
South Africa: Structural Issues to Dominate Long Term Growth
November 14, 2023 1:07 PM UTC
Figure 1: South Africa GDP Growth Forecasts to 2030 (%)
Source: Continuum Economics
Figure 2: Population Forecasts to 2030 (Thousand)
Source: Continuum Economics
Technology is also one positive driver of productivity in the 2020's alongside increased climate change investments but the impacts of Tec
October 19, 2023
Africa: Country Risk Ratings
October 19, 2023 9:19 AM UTC
Angola
Angola’s overall risk has decreased to a medium high level. In 2022 Lourenco was re-elected, after the previous presidency of Jose dos Santos that had lasted 38 years up to 2017. The new government has tried to increase investment from abroad through various policies, such as fiscal consolid
October 18, 2023
South Africa’s Inflation Spiked to 5.4% in September
October 18, 2023 12:10 PM UTC
Figure 1: CPI Inflation Rate, October 2021 – September 2023
Source: Datastream
Annual CPI amounted to 5.4% in September 2023, up from 4.8% in August. The food and non-alcoholic beverages contributed to the 5.4% annual inflation rate by 1.4 percentage points; housing and utilities by 1.3 percentage
October 17, 2023
Sub Sahara Africa: Country Risk
October 17, 2023 2:19 PM UTC
South Africa economic problems remain acute with large power cuts during the winter season and the logistic and transport crisis restraining production and exports. The government is trying to make progress on both fronts, but progress remains slow. Though the G7 and China has separately offered hel
October 10, 2023
South Africa’s Inflation is Expected to Increase in September
October 10, 2023 1:15 PM UTC
Figure 1: CPI Inflation Rate, October 2018 – August 2023
Source: Datastream
First, the weakening currency remained as one of the major risks against the inflation outlook. USD to Rand rate fell to a four-month low to 19.57 as of October 5 and the lagged feedthrough of previous declines is still fe
October 04, 2023
South Africa’s Current Account Deficit Remains Cloudy in 2023
October 4, 2023 1:38 PM UTC
Figure 1: Current Account Balance (Million Rand), November, 2018 – May, 2023
Source: Datastream, Continuum Economics
Figure 2: Foreign Trade (Million Rand), November, 2018 – May, 2023
Source: Datastream, Continuum Economics
After experiencing current account deficits (CAD) every year for nearly tw
September 28, 2023
EMEA Outlook: Domestic Factors and Geopolitics Dominate Heading to 2024 Election Year
September 28, 2023 7:45 AM UTC
EMEA Dynamics: Domestic Factors and Geopolitics Continue to Dominate the Outlook during 2024 Election Year
EMEA economies continue to be squeezed by the elevated DM interest rates, high oil and certain food prices, EU and China slowdown. However, country specific factors and geopolitics will continue
September 21, 2023
South Africa’s Inflation Slightly Rose in August
September 21, 2023 6:18 AM UTC
Figure 1: USD Rand Rate, September 2021 – July 2023
Source: Datastream
Despite the fall in headline inflation accelerated in June and July as inflation for food and non-alcoholic beverages (NAB) slowed, and fuel prices and transportation costs partly eased, the inflation outlook worsened in Augu
September 06, 2023
Exceeding Expectations: South Africa’s GDP Expanded by 0.6% in Q2
September 6, 2023 6:32 AM UTC
Figure 1:GDP (% YoY)
Source: Department of Statistics of South Africa
According to Department of Statistics of South Africa, 6 of 10 industries recorded growth in Q2, as agriculture (4.2%), manufacturing (2.2%), and finance (+0.7%), lead the way. We foresaw the growth in manufacturing in Q2 as recent
August 31, 2023
BRICS Band Expands: New Harmonies in Global Orchestra
August 31, 2023 10:57 AM UTC
Following the summit in Johannesburg last week, the South African President Cyril Ramaphosa announced that six new candidates have been selected to join the BRICS group, and will formally become members on January 1, 2024. This includes Iran, Saudi Arabia, Ethiopia, UAE, Argentina and Egypt. The inv