Navigate the business cycle with confidence
5th QUARTER OF MODERATE GDP GROWTH MIDST SERIOUS HEADWINDS, 25Q4 The business cycle is poised for economic recovery, albeit that it has been midst exceptional headwinds. Important leading economic indicators, such as business confidence and the SARB’s composite leading business cycle indicators affirm the incipient economic recovery. The RMB/BER business confidence index has jumped by … Read more
REAL GDP GROWTH SURPRISES, 25Q2 Whereas 25Q2 GDP figures were slightly better than expected, the sideways and erratic growth trend did not change. Real GDP bounced by 0.8% compared to 25Q1, following a flat tendency during the first quarter (real GDP up 0.1%). More importantly, what did change, is the composition of sectoral growth. This … Read more
GDP REMAINS FLAT, 23Q4 The release of the 23Q4 GDP figures completes the picture for the year The outstanding feature of the economy, is that it has little to no momentum, whether expanding or contracting. This pattern is well-established. The level of gross domestic fixed investment (23Q4) was still 7.2% down compared to pre-COVID levels, … Read more
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
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
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
Inflation has spiked in the US economy (and elsewhere) in recent months. The spike follows on the unprecedented economic shock in 2020 tied to the COVID-19 pandemic, when the global economy ground to a halt for almost six weeks, including intermittent lock down measures since. This disturbance of normal market forces and production value chains … Read more
From the end of 2016 and early 2017 it became clearer that the world economy was picking up nicely. Whilst 17Q1 witnessed some (temporary) slowing in the US, Euro area and Japanese growth surprised on the upside. China’s growth also continued close to 7% and the remainder of the emerging market universe recovered from the … Read more
From a solid start in January, the world economy seems to have moved up a gear during February. Renewed momentum is particularly evident in the Euro area and Japan (where flash PMI’s have hit multi-year highs in February). India is also moving beyond its policy-induced slowdown towards the end of last year and Brazil and … Read more