Navigate the business cycle with confidence
WEAK DEMAND CLOUDS THE OUTLOOK, 23Q3 SA’s post-COVID economic recovery has evolved to a precarious state. The pattern of rigid growth, characterised with an erratic quarterly pattern, continues. Ironically, the combination of a reprieve in electricity loadshedding (real value add up 0.2% in 23Q3) and a more competitive currency (undervalued by 4.2% on average) is … Read more
Living in an age of ‘radical uncertainty,’ we again find divergent views on the outlook for the business cycle at the current juncture of history. SA’s business cycle has two profound features, namely a strong international connection and, secondly, being exposed to the political structure of the day. Being a small open economy, generating insufficient … Read more
REPRIEVE IN LOADSHEDDING ASSISTS SUPPLY SIDE OF ECONOMY, 23Q2 On the supply-side, SA economic growth is constrained owing to infrastructure constraints and socio-political pressures, particularly in the run-up the next year’s national elections. Real GDP growth surprised on the positive side during 23Q2; compared to the weak first quarter, real growth of 0.6% was registered. … Read more
SA ECONOMY SCRAPES A TECHNICAL RECESSION, 23Q1 Following the contraction in real GDP during the final quarter of 2022, the economy scraped a technical recession during the first quarter, expanding by a modest 0.4%. Encouragingly, most sectors returned to growth during the first quarter. Overall growth would have been stronger was it not for a … Read more
REAL GDP CONTRACTS AGAIN IN STOP-START POST-COVID RECOVERY, 22Q4 Real GDP growth tapered off from 4.9% in 2021 to 2.0% in 2022. During the post-covid recovery, the quarterly growth pattern proved erratic. Last year was no exception. Impacted by brutal electricity loadshedding, amongst other factors, real GDP contracted again during 22Q4, by 1.3%. This followed … Read more
SA ECONOMIC RECOVERY CONTINUES, BUT REMAINS INCOMPLETE & FRAGILE, 22Q3 Following the 22Q2 plunge in economic activity related to flood damage in key provinces, as well as intensified electricity supply shortages, the economy rebounded nicely during 22Q3. Real GDP jumped by 1.6% qoq as most sectors registered growth. This momentum is equivalent to that of … Read more
SA ECONOMY EXPERIENCES AN UNTIMELY SETBACK, 22Q2 SA’s real GDP declined again during the second quarter, countering the welcome boost during the first quarter. GDP contracted by 0.7% (quarter-on-quarter), with the level of GDP now 0.3% below its 2019 pre-covid level. The contraction is partly a result of the serious flood damage in the KwaZulu-Natal … Read more
A comprehensive inflation shock Economic history is often replete with examples of present-day events. The inflation shock that hit the world in waves from early 2021 is clearly one of those events for which we seek an historic precedent. The global increase in inflation has been breath taking. Even the June 2022 month-on-month inflation readings … Read more
SA ECONOMY BACK TO PRE-COVID LEVELS; KEY SECTORS LAG, 22Q1 Real GDP received a notable boost during the first quarter of 2022. Quarterly growth came in well-above expectation at 1.9% (continuing at this pace for four quarters will deliver 8% growth). Real GDP surpassed the average 2019 (pre-covid) level. This was notably sooner than expected. … Read more
There is something scary about the latest inflation numbers around the world. US producer inflation reached 17.9% in March; that in Germany has shot up to 30%; locally, PPI inflation accelerated above expectation to 11.9%. Consumer inflation has followed, particularly in the goods department. US CPI inflation has accelerated to 8.6% (from 2.3% pre-covid); locally, … Read more