South Africa: rand under pressure
Battered by falling metal prices and labour unrest, the South African rand touched a four-year low on Thursday of 9.3836 to the US dollar.
And with the mining industry suffering strikes, the economy sluggish and credit rating agencies nervously eyeing the country’s finances, the currency could have further to fall. Continue reading »
S Africa consumers reluctant to take brake off spending
South Africa’s consumers are reluctant to take the brake off spending even though inflation is at a four-decade low, according to retail trade sales data released on Wednesday by government agency Statistics South Africa.
Retail sales growth softened to 2.8 per cent year-on-year in March from a revised 3.9 per cent in February. Despite the fall, consumption remains robust and was stronger than the 2.4 per cent consensus in a Bloomberg survey of 16 economists. Continue reading »
S Africa trade: did China come through?
In the run up to this month’s trade data from South Africa, there were a couple of different theories doing the rounds.
One was that the deficit would get a lot worse, based on a the timing of holidays and the recent industrial unrest (hurting exports); the other was that the trade account would get a lot better, based on the weakening rand and a pick up of exports to China. The Bloomberg analysts consensus was for a slight improvement at R8.5bn ($945m) deficit.
Which was right? Continue reading »
S Africa: China might make all the (trade) difference
A weaker rand may add to the cost of imports in South Africa, but there are positive effects. The depreciation that has seen the rand fall 6.47 per cent year to date is helping exports and, if could even help ease the country’s balance of trade headache.
Trade data due on Tuesday may show that Chinese imports from the country have shot up in March, according to one analyst, which could underpin an improvement in South Africa’s trade balance. It’s not the consensus view, but it’s worth taking note. Continue reading »
S Africa: more digging, less making?
After a few terrible months of mining data, South Africa seems to have turned a corner. That’s the good news.
The bad news is that manufacturing numbers pointed to a more worrying downturn, slumping after five months of growth. Continue reading »
S. Africa holds interest rates, fretting over growth and inflation
South Africa’s Reserve Bank left its benchmark interest rate unchanged at 5 per cent, out of concern that the recent decline in the rand is stoking inflation despite sluggish domestic economic growth.
The central bank surprised nobody, as analysts had expected no changes. And few envied the central bank governor Gill Marcus as she struggles to manage the risks to growth and the risks to inflation. Continue reading »
S Africa: weakening rand adds to list of economic woes
As South Africa’s Monetary Policy Committee has been meeting this week it will have been grappling with some familiar themes: a subdued global outlook and sluggish growth at home while juggling with the trade-off between boosting economic activity and countering inflationary pressures.
It’s a balancing act the MPC has battled with for more than a year, but now a new spanner has been thrown into the works: the sharp depreciation of the rand this year (not to mention any fallout from the Cyprus banking saga.) Continue reading »
South Africa: weak retail sales could increase pressure for rate cut
South Africa’s retail sales slowed in January, according to data released on Wednesday, as consumers reacted to the growing gloom over the economy.
As the rand fell to a new four-year low against the dollar on Wednesday of 9.2, the South Africa Reserve Bank – due to hold its second policy meeting of the year next week – could face pressure for an interest rate cut. The reserve bank cut rates by 50 basis points last July at the height of the 2012 eurozone crisis. Continue reading »
South Africa: rand slumps on deficit
South Africa’s central bank delivered a nasty shock on Tuesday morning: the country’s trade and current accounts were in a worse state at the end of 2012 than previously realised, and they were precariously funded.
The rand moved sharply, falling from 9.04 to the dollar at the open to as low as 9.21, before recovering to about 9.18 at 10.15 GMT. Continue reading »
Guest post: South Africa’s fundamental conundrum exposed in the budget
By Peter Attard Montalto of Nomura
South Africa’s 2013 Budget presented this week by finance minister Pravin Gordhan was like a snapshot of a car on a hill with its handbrake off – seemingly still and fixed to the ground, yet actually at great risk.
On the surface things are calm. but look ahead and there are serious dangers on the road ahead. Continue reading »
S Africa: record trade gap hits rand
The South African rand plunged by as much as 2 per cent against the dollar on Thursday after the country posted a record trade deficit last month of R24.5bn ($2.8bn) – compared to R2.7bn in December and forecasts of around R10bn. Continue reading »
SA budget: reaction
After the GDP numbers, the budget: South Africa’s finance minister Pravin Gordhan delivered the national budget on Wednesday, following Tuesday’s confirmation that GDP was 2.5 per cent for 2012.
What did analysts and the media make of it? Beyondbrics presents a round up. Continue reading »
S Africa GDP: better than feared
Phew. Predictions of a poor fourth quarter for South Africa failed to materialise as GDP growth came in at 2.1 per cent, quarter-on-quarter, making an increase of 2.5 per cent for 2012 as a whole.
It’s still far cry from the faster rowth of 2010 and early 2011, when 3.5 per cent and above was the norm, and is one of the weaker years of the last decade. But after months of strikes, labour unrest and political uncertainty, it will come as something of a relief. Continue reading »
S Africa vehicle sales: in the fast lane
Insert your own green light / accelerating away / high speed metaphor here.
Vehicle sales in South Africa grew by 14.1 per cent in January (year on year) according to numbers released on Monday – a rare piece of positive economic data from a South African economy which has been showing signs of slowing growth. Continue reading »
Falling rand: look on the bright side?
A weaker rand might not be such a bad thing for the South African economy, given the boost it would give to exporters – so said the South African central bank last week. Are they correct, or just looking on the bright side?
That depends on whether the devaluation is steady, or turns into a meltdown – a matter which may be out of their hands. Continue reading »
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