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COUNTRY INSIGHTS

SA Water Crisis: Self-made or Natural?
SOUTH AFRICA · Report · 01 Oct 2014

Over the past few weeks, Gauteng Province has experienced a new crisis, this time related to another key socio-economic infrastructure category, namely water availability. Hot on the heels of continued disruptions to power supply and rising costs of electricity over the past five years, the persi...

Inflation Outlook in Limbo
SOUTH AFRICA · Report · 25 Sep 2014

The increase in the core inflation rate – from 5.3 to 5.8% between January and August 2014 – suggests that so-called “second round effects” of inflation, i.e. past inflation causing an inflationary spiral, are surfacing steadily. At the same time, the headline inflation rate has been in breach of...

Repo Rate on Hold despite Mounting CPI
SOUTH AFRICA · Report · 19 Sep 2014

As she tabled her last Monetary Policy Committee (MPC) statement of the South African Reserve Bank (SARB), Governor Gill Marcus left the repo rate unchanged at 5.75% per year. However, she cautioned of increasing upside risks to inflation on the back of a weak exchange rate. The Bank highlighted ...

The Current Account Balance Deteriorates Substantially In 2014 Q2
SOUTH AFRICA · Report · 09 Sep 2014

Official figures released today by the South African Reserve Bank (SARB) show that the magnitude of the current account deficit worsened in 2014 Q2, recording a shortfall of R222 billion compared to R161 billion in the preceding quarter – see Table 1. Graph 1 Balance of payments on current accoun...

Recession Averted But Underlying Weakness Prevails
SOUTH AFRICA · Report · 27 Aug 2014

Following a 0.6% quarter-on-quarter seasonally adjusted and annualized (q/q saa) contraction in the first quarter of 2014, the South African economy expanded by the same magnitude in Q2 2014 (see Graph 1). Graph 1 Inflation-adjusted GDP growth rate, South Africa, 2008 Q1 – 2014 Q2 Note: Seasonall...

New Test for the Repo Rate Hiking Cycle Rule
SOUTH AFRICA · Report · 22 Aug 2014

Statistics South Africa (Stats SA) will publish the second quarter of 2014 gross domestic growth outcome on 26 August 2014. Following a 0.6 per cent contraction on a quarter-on-quarter seasonally adjusted and annualised basis in Q1 2014, we expect a positive (albeit pedestrian) growth rate in Q2 ...

Missing the Recovery Trajectory
SOUTH AFRICA · Forecast · 11 Aug 2014

Executive Summary The South African economic performance in 2014 has been marred by damaging strikes which gave enough reasons for negative credit ratings actions. Labour unions have grown radical and militant. Splintering among unions along political fault lines suggests that South Africa has en...

Chasing after Inflationary Winds
SOUTH AFRICA · Report · 17 Jul 2014

The Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) raised the repo rate by 25 basis points today. Governor Marcus stated that despite the predicament of rising inflation and subdued growth, the SARB remained committed to maintaining price stability. Against this backdrop...

MPC Pendulum Swaying Towards a Rate Hike
SOUTH AFRICA · Report · 14 Jul 2014

The outlook on South Africa’s consumer price inflation has deteriorated more than the South African Reserve Bank (SARB) had anticipated. Meanwhile, South Africa’s economic growth outlook has suffered and continues to do so as a result of, inter alia, labor-related production stoppages. Despite th...

Relay Race For SA Labor Demands
SOUTH AFRICA · Report · 01 Jul 2014

Barely a week after the end of a prolonged (five-month) industrial action in the platinum industry, a new strike, this time in the metals industry, has just gotten underway. More than 200,000 workers affiliated with the National Union of Metalworkers of South Africa (NUMSA) embarked today on an “...

The Current Account Deficit Narrows In 2014 Q1
SOUTH AFRICA · Report · 19 Jun 2014

According to official figures released today by the South African Reserve Bank (SARB), the current account balance registered a deficit of R161 billion in 2014 Q1 compared to a shortfall of R179 billion in the previous quarter. As shown in Graph 1, the decrease in South Africa’s current account d...

President Zuma’s State of Nation Address
SOUTH AFRICA · Report · 18 Jun 2014

As expected, President Zuma delivered the first State of Nation Address of his second term in office with sharp focus on the economy, carefully navigating all the tough and thorny issues. President Zuma pronounced that the “second phase of the revolution” has begun. In the African National Congre...

“It never rains but it pours”
SOUTH AFRICA · Report · 02 Jun 2014

Recent prints of South African economic indicators paint a picture of an ailing domestic economy badly in need of emergency procedures before it is too late. On the whole, downbeat economic activity (particularly in mining and manufacturing) coupled with elevated inflationary pressures have so fa...

2014 Economic Performance Off To A Bad Start
SOUTH AFRICA · Report · 27 May 2014

According to official figures released by Statistics South Africa, the inflation-adjusted gross domestic product (GDP) shrank by 0.6% on a quarter-on-quarter (q/q), seasonally adjusted annualized (saa) basis in the first quarter of 2014 (see Graph 1). Anemic mining and manufacturing activity was ...

No Hike in the Benchmark Interest Rate…For Now
SOUTH AFRICA · Report · 22 May 2014

The South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC) has opted to leave the repo rate at 5.5% per year (see Graph 1). The Bank cited a challenging environment characterized by a weak domestic economy coupled with elevated price pressures as factors that informed its stance. Gra...

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