South Africa: the economic outlook is still gloomy – BNP Paribas
|Christine Peltier from BNP Paribas Economic Research Department offered her take on South-Africa’s (gloomy) economic outlook.
Key Quotes:
“Economic growth has averaged only 1% per year since 2015, and weakened further in H1 2019. Exports have suffered from slower world demand growth while structural constraints have weighed heavily on investment, which has declined continuously since early 2018. Major power outages have disrupted activity in 2019: they result from the severe troubles of state-owned company Eskom, and illustrate well the country’s lack of infrastructure. Only steady progress in the structural reform process will allow investment to recover in the medium term.”
“Meanwhile, real GDP growth is expected to remain low (projected at 0.4% in 2019 and 0.8% in 2020) and policymakers’ room for manoeuvre to boost domestic demand is very narrow. On the fiscal front, financial support to rescue Eskom has aggravated the rise in government deficits (5.3% in the 12-month period to June 2019) and public debt. On the monetary front, the central bank has slightly cut its policy (repo) rate this year, but fiscal slippage and the country’s reliance on foreign financing should prevent further monetary policy easing the short term.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.