Wednesday March 20 2019
South Africa Inflation Rate Edges Up to 4.1% in February
Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The annual inflation rate in South Africa rose slightly to 4.1 percent in February 2019 from 4 percent in the prior month, matching market expectations. Prices increased faster mainly for transport, as fuel cost rebounded.

Year-on-year, inflation quickened primarily for transport (3.6 percent vs 2.9 percent in January), as cost of fuels bounced back (0.9 percent vs -1.2 percent). Also, prices rose slightly faster for miscellaneous goods & services (5.4 percent vs 5.3 percent); household contents and services (3.5 percent vs 3.4 percent); recreation & culture (1.2 percent vs 1.1 percent) and restaurants & hotels (4.1 percent vs 3.6 percent). 

Meanwhile, prices slowed for housing & utilities (5.3 percent vs 5.4 percent); food & non-alcoholic beverages (2.9 percent vs 3 percent), led by meat (-0.5 percent vs 0.8 percent); fish (5.7 percent vs 5.9 percent) and vegetables (8.9 percent vs 11.1 percent); alcoholic beverages & tobacco (4.6 percent vs 4.7 percent) and health (4.3 percent vs 4.8 percent). At the same time, inflation remained steady for clothing & footwear (at 1.8 percent); education (at 6.7 percent) and communication (at 1.5 percent).

Annual core inflation rate, which excludes cost of food, non-alcoholic beverages, fuel and energy, stood at 4.4 percent in February, unchanged from the previous three months and in line with market consensus. It holds at the highest level since May. Compared to the previous month, core consumer prices went up 1.1 percent, after a 0.2 percent in January and matching market estimates.

On a monthly basis, consumer prices inched up 0.8 percent, following a 0.2 percent decrease in the previous month and slightly below market expectations of a 0.85 percent increase. Main upward pressure came from transport prices (0.4 percent vs -3.3 percent), namely fuels (0.3 percent vs -10.2 percent).




Tuesday March 05 2019
South Africa GDP Growth Weakens to 1.4% QoQ in Q4
Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The South African economy advanced a seasonally adjusted annualized 1.4 percent on quarter in the three months to December of 2018, following an upwardly revised 2.6 percent growth in the previous period and missing market expectations of a 1.8 percent expansion. Manufacturing and agriculture grew less and contractions were primarily recorded in internal trade, public administration and mining.

Manufacturing grew 4.5 percent, slowing from a 7.5 percent expansion, driven by production of petroleum, chemical products, rubber and plastic products, motor vehicles, parts and accessories and other transport equipment, and food and beverages.

The agriculture, forestry and fishing sector rose 7.9 percent, after rising 13.7 percent in the third quarter. The increase was supported by higher production of field crops.

The electricity, gas and water industry grew 0.2 percent compared to a 0.8 percent rise in the previous period, largely due to an increase in electricity consumed and water distributed.

Meantime, contractions were seen in trade, catering & accommodation (-0.7 percent vs 3.4 percent); government services (-0.6 percent vs 1.9 percent), owing to a decrease in employment; and mining & quarrying (-3.8 percent vs -8.9 percent), amid lower production in mining of gold and ‘other’ mining and quarrying (including diamonds). Also, the construction sector shrank (-0.7 percent vs -1.7 percent), with decreases reported for residential buildings, non-residential buildings and construction works.

Conversely, transport, storage & communications (7.7 percent vs 6.8 percent); finance, insurance and business services (2.7 percent vs 2.1 percent) and personal services (1.7 percent vs 0.6 percent) grew at a faster pace.

Year-on-year, the economy advanced 1.1 percent in the fourth quarter of 2018, after an upwardly revised 1.3 percent growth in the prior period and compared with market consensus of a 0.6 percent advance

Considering full 2018, the GDP advanced 0.8 percent, far below an upwardly revised 1.4 percent in 2017. Slower expansions were observed in finance, insurance and business services (1.8 percent vs 2.1 percent) and personal services (1.0 percent vs 1.3 percent). Additionally, contractions were recorded in agriculture (-4.8 percent vs 21.1 percent); mining (-1.7 percent vs 4.2 percent) and construction (-1.2 percent vs -0.6 percent). On the other hand, manufacturing rebounded (1 percent vs -0.2 percent).




Tuesday March 05 2019
South Africa GDP Annual Growth Slows Less than Expected
Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The South African economy expanded 1.1 percent year-on-year in the fourth quarter of 2018, after an upwardly revised 1.3 percent growth in the prior period while markets had expected it to advance 0.6 percent. Slower growth was seen in internal trade, utilities and public administration while the agricultural sector shrank.

Trade, catering and accommodation (0.3 percent vs 1.1 percent in Q3), utilities (1.1 percent vs 1.4 percent) and government services (1.0 percent vs 1.6 percent) rose much less. In addition, declines were seen in agriculture, forestry & fishing (-0.6 percent vs 9.4 percent); mining (-3.4 percent vs -3.8 percent) and construction (-1.1 percent vs -0.8 percent).

Meanwhile, faster growth was recorded in finance, real estate and business services (3.1 percent vs 1.9 percent); personal services (1.1 percent vs 0.7 percent); transport, storage & communication (2.4 percent vs 1.9 percent) and manufacturing (1.3 percent vs 1.2 percent).

On a seasonally adjusted quarterly basis, the economy expanded 1.4 percent on quarter in the three months to December of 2018, following an upwardly revised 2.6 percent growth in the previous period and missing market expectations of a 1.8 percent growth. The slowdown was mainly driven by manufacturing, agriculture, trade, catering & accomodation and public administration.

Considering full 2018, the GDP advanced 0.8 percent, far below an upwardly revised 1.4 percent in 2017. Slower expansions were observed in finance, insurance and business services (1.8 percent vs 2.1 percent) and personal services (1.0 percent vs 1.3 percent). Additionally, contractions were recorded in agriculture (-4.8 percent vs 21.1 percent); mining (-1.7 percent vs 4.2 percent) and construction (-1.2 percent vs -0.6 percent). On the other hand, manufacturing rebounded (1 percent vs -0.2 percent).

The government and central bank see the economy expanding by 1.5 percent and 1.7 percent, respectively, in 2019.




Thursday February 28 2019
South Africa Posts Widest Trade Gap in a Year
South African Revenue Service | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

South Africa recorded a trade gap of ZAR 13.1 billion in January 2019 compared to a downwardly revised ZAR 16.70 billion surplus in the prior month and market expectations of a ZAR 12.8 billion deficit. It is the largest trade shortfall since January 2018.

Imports climbed 18.9 percent month-over-month to ZAR 101.76 billion in January of 2019. It is the strongest rise in a year, boosted by higher purchases of machinery & electronics (31 percent); original equipment components (79 percent); base metals (74 percent) and textiles (74 percent). In contrast, imports declined for mineral products (-19 percent). The most important import partners were: China (23.1 percent of total purchases), Germany (9.2 percent), the US (5.7 percent), India (4.2 percent) and Saudi Arabia (3.4 percent).

Exports fell 13.3 percent from a month earlier to ZAR 88.68 billion, due to lower shipments of vehicle & transport equipments (-51 percent); precious metals & stones (-12 percent); machinery & electronics (-16 percent) and base metals (-9 percent). On the other hand, sales of mineral products grew 4 percent. Main export partners were: China (11.1 percent of total shipments), the US (8.1 percent), Germany (6.2 percent), Japan (4.8 percent) and Botswana (4.8 percent).

Excluding trade with neighboring Botswana, Lesotho, Namibia and Swaziland, the country trade balance shifted to a trade deficit of ZAR 20.44 billion in January of 2019 compared to a downwardly revised trade surplus of ZAR 8.53 billion in the prior month.




Wednesday February 20 2019
South Africa Inflation Rate at Near 1-Year Low of 4%
Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The annual inflation rate in South Africa declined to 4.0 percent in January of 2019 from 4.5 percent in the previous month and below market expectations of 4.3 percent. It is the lowest inflation rate since March last year mainly due to falling fuel prices.

Year-on-year, inflation slowed mainly for transport (2.9 percent vs 6.0 percent in December), due to lower cost of fuels (-1.2 percent vs 8.7 percent) reflecting the significant drop in international oil prices since September. Also, prices rose less for miscellaneous goods & services (5.3 percent vs 5.6 percent); alcoholic beverages & tobacco (4.7 percent vs 4.9 percent); restaurants & hotels (3.6 percent vs 3.7 percent) and health (4.8 percent vs 5.2 percent). Meantime, inflation was steady for food & non-alcoholic beverages (3.0 percent); housing & utilities (5.4 percent); recreation & culture (1.1 percent) and education (6.7 percent).

On the other hand, cost advanced faster for household contents and services (3.4 percent vs 3.2 percent); clothing & footwear (1.8 percent vs 1.7 percent) and communication (1.5 percent vs 1.4 percent).

Annual core inflation rate, which excludes cost of food, non-alcoholic beverages, fuel and energy, stood at 4.4 percent in January, unchanged from the two previous months and slightly below market expectations of 4.5 percent. It holds at the highest level since May. Compared to the previous month, core consumer prices went up 0.2 percent, following a 0.3 percent increase in December and below estimates of a 0.3 percent gain.

On a monthly basis, consumer prices dropped 0.2 percent, the same pace as in the preceding month and against market consensus of a 0.1 percent increase. Main downward pressure came from cost of transport (-3.3 percent vs -2.8 percent), namely fuels (-10.2 percent vs -8.0 percent) which posted the biggest monthly drop since January 2015.


Tuesday February 12 2019
South Africa Jobless Rate Drops to 27.1% in Q4
Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in South Africa decreased to 27.1 percent in the fourth quarter of 2018 from 27.5 percent in the previous period. The unemployment rate usually falls in the last quarter of the year, due to higher job activity during the festive season. However, a year earlier, the jobless rate was lower at 26.7 percent.

The number of unemployed decreased by 70 thousand to 6.14 million from 6.21 million in the third quarter of 2018. Employment rose by 149 thousand to 16.53 million from 16.38 million in the previous period. Job creation was registered in the formal sector (+92 thousand), private households (+65 thousand), manufacturing (+48 thousand), finance (+109 thousand), mining (+31 thousand), trade (+14 thousand) and in agriculture (+7 thousand).  Meanwhile, cuts ocurred in utilities (-22 thousand), construction (-21 thousand), transport services (-30 thousand), community and social services (-51 thousand) and in the informal sector (-15 thousand).

The labour force force also increased by 79 thousand to 22.67 million from 22.59 million in the previous quarter and those detached from it went up by 70 thousand to 15.47 million from 15.40 million in Q3.

The expanded definition of unemployment, including people who have stopped looking for work, decreased to 37 percent in the fourth quarter of 2018 from 37.3 percent in the third quarter.

By genders, the jobless rate decreased for men (25.1 percent vs 25.9 percent in Q3) but it edged up for women (29.5 percent vs 29.4 percent). Also, the youth unemployment rate climbed to 54.7 percent from 52.8 percent in Q3, hitting the highest level since Q2 2017.




Thursday January 31 2019
South Africa Posts Largest Trade Surplus Since 2016
South African Revenue Service | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

South Africa recorded a trade surplus of ZAR 17.2 billion in December 2018 compared to a downwardly revised 3.29 billion surplus in the prior month and beating market expectations of a ZAR 9.0 billion surplus. It is the widest trade surplus since May 2016, as imports fell faster than exports. In 2018, the country posted a trade surplus of ZAR 11.3 billion compared to a ZAR 76.7 billion surplus in the previous year.

Imports tumbled 25.8 percent month-over-month to ZAR 85.58 billion in December 2018, the lowest amount since July 2017. Lower purchases were registered for: machinery & electronics (-31 percent); mineral products (-16 percent); original equipment components (-44 percent); chemical products (-24 percent) and base metals (-38 percent). The most important import partners were: China (16.1 percent of total purchases), Germany (8.1 percent), the US (6.3 percent), Saudi Arabia (4.8 percent) and Nigeria (4.3 percent).

Exports declined 13.4 percent from a month earlier to ZAR 102.75 billion, amid lower sales of precious metals & stones (-19 percent); mineral products (-12 percent);  vehicle & transport equipments (-9 percent); machinery & electronics (-22 percent) and base metals (-13 percent). Main export partners were: China (9.2 percent of total shipments), Germany (7.6 percent), the US (7.2 percent), India (4.9 percent) and Japan (4.6 percent).

Excluding trade with neighboring Botswana, Lesotho, Namibia and Swaziland, the country trade balance shifted to a trade surplus of ZAR 8.97 billion in December 2018 compared to an upwardly revised trade deficit of ZAR 6.59 billion in the previous month.


Wednesday January 23 2019
South Africa Inflation Rate Dips to 7-Month Low of 4.5%
Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The annual inflation rate in South Africa fell to 4.5 percent in December of 2018, reaching the mid-point of the central bank’s target range of 3 percent to 6 percent, from 5.2 percent in the previous month. It is the lowest annual inflation since May as cost of transport slowed sharply.

Year-on-year, inflation was lower mostly for transport (6.0 percent vs 10.7 percent in November), amid a sharp slowdown in cost of fuels (8.7 percent vs 23.1 percent), after a stronger rand and lower international crude oil prices contributed to fall in gasoline cost.  Also, prices eased for food & non-alcoholic beverages (3.0 percent vs 3.4 percent), namely fish (5.7 percent vs 6.0 percent); meat (1.8 percent vs 2.8 percent) and fruit (-1.5 percent vs -3.7 percent); household contents and services (3.2 percent vs 3.4 percent); clothing & footwear (1.7 percent vs 1.8 percent) and restaurants & hotels (3.7 percent vs 4.1 percent). At the same time, inflation was steady for education (6.7 percent) and communication (1.4 percent). 

Meanwhile, prices rose faster for: housing & utilities (5.4 percent vs 5.2 percent), including rents (4.2 percent), water (11 percent) and electricity (7.7 percent); miscellaneous goods & services (5.6 percent vs 5.5 percent); alcoholic beverages & tobacco (4.9 percent vs 4.8 percent); recreation & culture (1.1 percent vs 0.9 percent) and health (5.2 percent vs 5.1 percent).

Annual core inflation rate, which excludes cost of food, non-alcoholic beverages, fuel and energy, stood at 4.4 percent, unchanged from November and slightly below market consensus of 4.5 percent. It remains at the highest level since May. Compared to the previous month, core consumer prices went up 0.3 percent, after increasing 0.2 percent in November and below estimates of 0.4 percent.

On a monthly basis, consumer prices fell 0.2 percent, following a 0.2 percent gain in November, in line with market expectations. Prices declined mainly for transport (-2.8 percent vs 0.6 percent), pushed down by cost of fuels (-8.0 percent vs 1.1 percent) while inflation was steady for food & non-alcoholic beverages (vs 0.4 percent in November). In contrast, cost went up for housing & utilities (0.5 percent, after being flat in November).


Thursday January 17 2019
South Africa Holds Interest Rate Steady at 6.75%
SARB | Stefanie Moya | stefanie.moya@tradingeconomics.com

The South African Reserve Bank left its benchmark repo rate unchanged at 6.75 percent on January 17th 2019 after hiking it by 25 bps in the previous meeting, as widely expected. Policymakers said the decision is accommodative and monetary policy actions will continue to focus on anchoring inflation near to the mid-point of the target range in the interest of sustainable growth. The Committee noted international developments including oil prices and the exchange rate depreciation as the key drivers of an improved inflation outlook.

Excerpts from the statement by Governor Lesetja Kganyago:

The near-term inflation forecast generated by the SARB’s Quarterly Projection Model (QPM) has improved significantly since the previous MPC. Headline inflation is now expected to average 4.6% in 2018 (down from 4.7%) and 4.8% in 2019 (down from 5.5%), before increasing to 5.3% in 2020 (down from 5.4%) and moderating to 4.8% in 2021. Headline CPI inflation is now expected to peak at around 5.6%, in the first quarter of 2020. Core inflation is expected remain unchanged at 4.3% in 2018 and forecast to average 5.0% in 2019 (down from 5.3%), 5.1% in 2020 (down from 5.5%) and 4.8% in 2021. These inflation projections are based on an interest rate path generated by the QPM.

Since the November MPC, the rand has appreciated by 1.4% against the US dollar, by 1.5% against the euro, and by 0.5% on a trade-weighted basis. The implied starting point for the rand is R14.30 against the US dollar, compared with R14.50 at the time of the previous meeting. At these levels, the QPM assesses the rand to be less undervalued.

The domestic growth outlook remains sluggish. Although, GDP increased by 2.2% in the third quarter of 2018, private sector fixed investment remains weak and production in key sectors is volatile. The SARB now expects growth in 2018 to have averaged 0.7% (up from 0.6% in November). The growth forecast for 2019 is 1.7% (down from 1.9%), it is unchanged at 2.0% for 2020 and increases to 2.2% in 2021. At these growth rates, the negative output gap is expected to close in the first quarter of 2021.

The MPC assesses the risks to the growth forecast to be on the downside. Weak business and consumer confidence continue to weigh on fixed capital formation. This could be exacerbated by the possibility of protracted electricity supply constraints. Prudent macroeconomic policies are essential to ensuring that growth is sustainable and the economy is more resilient to shocks. Furthermore, the Committee remains of the view that current challenges facing the economy are primarily structural in nature.The implementation of credible structural policy initiatives that make a marked impact on potential output and employment and lower the cost structure of the economy should be prioritised.

The MPC has taken note of the improved inflation outlook, especially in the near-term. Over the forecast period, inflation is expected to remain within the inflation target range, averaging 5.3% in 2020 and 4.8% in 2021.

The overall risks to the inflation outlook are assessed to be moderately on the upside. The risks include administered prices such as electricity and water tariffs, rising domestic food prices in the outer years, changing investor sentiment towards emerging markets, moderation in global growth and volatile international oil prices.

Against this backdrop, the MPC unanimously decided to keep the repurchase rate unchanged at 6,75% per year.




Friday December 28 2018
South Africa Trade Balance Swings to Surplus in November
South African Revenue Service | Stefanie Moya | stefanie.moya@tradingeconomics.com

South Africa trade balance shifted to a ZAR 3.49 billion surplus in November of 2018 from a downwardly revised ZAR 4.29 billion deficit in the previous month and beating market expectations of a ZAR 2.25 billion gap. Considering the January to November period, the country recorded a ZAR 4.16 billion shortfall.

Imports dropped 8.4 percent month-over-month to ZAR 115.35 billion, mostly due to lower purchases of mineral products (-10 percent); chemical products (-9 percent); precious metals & stones (-56 percent); original equipment components (-23 percent) and vehicles & transport equipments (-9 percent). The most important import partners were: China (19.6 percent of total imports), Germany (9.5 percent), the US (6.4 percent), Saudi Arabia (4.8 percent) and Nigeria (3.9 percent).

Exports declined 2.3 percent month-over-month to ZAR 118.84 billion, mainly due to lower sales of vegetable products (-26 percent); prepared foodstuff (-9 percent) and vehicle & transport equipments (-13 percent). Meanwhile, sales increased for mineral products (2 percent) and chemicals (6 percent). Main export partners were: China (9.9 percent of total exports), Germany (8.5 percent), the US (7.0 percent), Japan (4.9 percent) and India (4.8 percent).

Excluding trade with neighboring Botswana, Lesotho, Namibia and Swaziland, the country recorded a trade gap of ZAR 6.40 billion in November.