Tuesday May 15 2018
South Africa Jobless Rate Steady at 26.7% in Q1
Statistics South Africa | Stefanie Moya | stefanie.moya@tradingeconomics.com

South Africa's unemployment rate came in at 26.7 percent in the first quarter of 2018, unchanged from the previous period. The number of unemployed increased by 100 thousand to 5.98 million and the number of employed rose by 207 thousand to 16.38 million.

The number of unemployed persons jumped by 100 thousand to 5.98 million from 5.88 nillion in the fourth quarter of 2017. Employment grew by 207 thousand to 16.38 million from 16.17 million in the prior period. Jobs gains occurred in formal sector (111 thousand), informal (93 thousand) and in private household (5 thousand) while losses were recorded in agriculture (-3 thousand).

The labour force edged up by 307 thousand to 22.36 million from 22.05 million in the fourth quarter and those detached from it declined by 154 thousand to 15.32 million from 15.47 million.

The expanded definition of unemployment, including people who have stopped looking for work, rose to 36.7 percent in the first quarter of the year from 36.3 percent in the previous quarter.

A year earlier, the jobless rate was higher at 27.7 percent.




Monday April 30 2018
South Africa Trade Surplus Beats Expectations
South African Revenue Service | Stefanie Moya | stefanie.moya@tradingeconomics.com

South Africa trade balance shifted to ZAR 9.47 billion surplus in March of 2018, from an upwardly revised ZAR 0.60 billion deficit in the previous month, and well above market expectations of a ZAR 3.7 billion surplus. It was the smallest trade surplus since October last year. Considering the first quarter of the year, the country recorded a trade deficit of ZAR 18.6 billion.

Exports increased 9.2 percent month-over-month to ZAR 98.3 billion in March of 2018, mostly due to higher sales of base mineral (+12 percent); precious metals and stones (15 percent); base metals (19 percent) and machinery and electronics (10 percent). The most important export partners were: China (10.2 percent of total exports), the US (7.1 percent), Germany (7.0 percent), Japan (4.7 percent) and India (4.7 percent).

Imports dropped 2.0 percent month-over-month to ZAR 88.8 billion, mainly due to a fall in purchases of vegetable products (-31 percent) and mineral (-14 percent). In contrast, purchases increased for base metals (13 percent) and machinery and electronics (6 percent). Main import partners were: China (18.1 percent of total imports), Germany (10.1 percent), the US (6.3 percent), Saudi Arabia (4.9 percent) and Thailand (3.8 percent).

Excluding trade with neighboring Botswana, Lesotho, Namibia and Swaziland, the country posted a trade surplus of ZAR 1.9 billion in March.




Wednesday April 18 2018
South Africa Inflation Rate Lowest Since 2011
Statistics South Africa | Stefanie Moya | stefanie.moya@tradingeconomics.com

Consumer prices in South Africa rose 3.8 percent year-on-year in March of 2018, slowing from a 4.0 percent gain in the previous month and below market consensus of a 4.1 percent increase. It was the lowest inflation rate since February of 2011, mostly due to lower prices of food and non-alcoholic beverages and transport.

Year-on-year, prices eased for food and non-alcoholic beverages (3.5 percent compared to 3.9 percent in February), namely processed food (2.7 percent compared to 3.3 percent), unprocessed (4.3 percent compared to 4.7 percent) and meat (10.0 percent compared to 11.4 percent). Additionally, cost slowed for transport (2.8 percent compared to 3.2 percent), mainly due to fuel (2.9 percent compared to 5.1 percent); alcoholic beverages and tobacco (5.2 percent compared to 6.1 percent) and recreation and culture (0.3 percent compared to 0.5 percent). Also, prices increased at a softer pace for clothing and footwear (1.5 percent compared to 1.6 percent); restaurants and hotels (2.8 percent compared to 3.0 percent); education (6.7 percent compared to 7.0 percent) and health (5.1 percent compared to 5.7 percent). On the other hand, cost advanced faster for housing and utilities (4.6 percent compared to 4.5 percent) and household equipment (2.0 percent compared to 1.9 percent) while inflation was steady for miscellaneous goods and services (6.2 percent, the same as in February).

Annual core inflation rate, which excludes cost of food, non-alcoholic beverages, petrol and energy, was unchanged at 4.1 percent in March of 2018, below market expectations of 4.3 percent. Compared to February, core consumer prices went up 0.7 percent, easing from a 1.1 percent increase.

On a monthly basis, consumer prices advanced 0.4 percent, compared to a 0.8 percent rise in February, and below market expectations of a 0.6 percent gain.




Thursday March 29 2018
South Africa Trade Balance Swings to Surplus in February
South African Revenue Service | Stefanie Moya | stefanie.moya@tradingeconomics.com

South Africa trade balance shifted to ZAR 0.43 billion surplus in February of 2018, compared to a downwardly revised ZAR 27.1 billion deficit in the prior month, and above market consensus of a ZAR 3.0 billion deficit. It was the smallest trade surplus since November of 2015.

Imports declined 16.5 percent month-over-month to ZAR 90.2 billion in February of 2018, mainly due to lower purchases of machinery and electronics (-25 percent); mineral products (-16 percent); vehicles and transport equipment (-17 percent); chemical products (-12 percent); base metals (-24 percent) and original equipment components (-13 percent). The most important import partners were: China (18.6 percent of total imports), Germany (10.8 percent), the US (5.5 percent), Saudi Arabia (5.3 percent) and Nigeria (4.9 percent).

Exports rose 12.0 percent month-over-month to ZAR 90.6 billion, mostly due to higher sales of vehicles and transport equipment (117 percent); precious metals and stones (14 percent); machinery and electronics (25 percent) and prepared foodstuff (18 percent). Main export partners were: China (9.3 percent of total exports); Germany (7.7 percent); the US (6.4 percent); Japan (4.8 percent) and Botswana (4.6 percent).

Excluding trade with neighboring Botswana, Lesotho, Namibia and Swaziland, the country posted a trade deficit of ZAR 6.6 billion in February.


Wednesday March 28 2018
South Africa Cuts Interest Rate by 25 Bps to 6.5%
SARB | Stefanie Moya | stefanie.moya@tradingeconomics.com

The South African Reserve Bank cut its benchmark repo rate steady by 25 bps to 6.5 percent on March 28th 2018, in line with market expectations, mentioning lower inflation expectations. The Committee added that the upside inflationary pressure from the increase in the VAT rate will be offset by the stronger exchange rate.

Excerpts from the statement by Governor Lesetja Kganyago:

The inflation forecast of the SARB has shown a moderate improvement despite the adverse impact of the VAT increase due to be implemented in April. This increase, combined with base effects and other indirect tax increases, implies that the low point of the inflation cycle was reached in the first quarter of 2018, at a forecast average of 4.1%. Headline inflation is expected to average 4.9% in 2018 (unchanged from the previous forecast), 5.2% in 2019 (down from 5.4%), and 5.1% in 2020. A peak of 5.5% is expected by the first quarter of 2019 before the VAT increase falls out of the data. The forecast for core inflation is unchanged at 4.6% for 2018 and is 0.2 percentage points lower, at 4.9%, for 2019. It is expected to remain unchanged at 4.9% in 2020.

The main changes in the forecast related to the VAT increase and the exchange rate. The VAT increase is expected to add about 0.6 percentage points to the headline inflation trajectory for the four quarters from the second quarter of 2018, with marginal second-round effects persisting into subsequent quarters. The improved exchange rate has softened the impact of the indirect tax adjustments on the inflation forecast. The implied starting point for the rand is R11.97 against the US dollar compared with R12.90 at the time of the previous MPC meeting. 

Since the previous meeting of the MPC, the rand has appreciated by 4.8% against the US dollar, by 3.2% against the euro, and by 3.5% on a trade-weighted basis. At current levels, the SARB’s model assesses the rand to be somewhat overvalued, and further strengthening potential is probably limited.

The domestic economic growth outlook for this year is more favourable but remains challenging. This follows an upward revision of historical gross domestic product (GDP) data and a fourth-quarter outcome of 3.1% which surprised on the upside. Following an annual growth rate of 1.3% in 2017, the SARB expects a growth rate of 1.7% for 2018 compared with 1.4% previously. The forecast for 2019 is 1.5%, marginally lower than the previous forecast of 1.6%, while a growth rate of 2.0% is forecast for 2020. At these growth rates, the negative output gap, which measured -1.1% in 2017, is expected to close in 2020.

The MPC assesses the risks to the inflation forecast to be more or less evenly balanced. Some of the key domestic risks and uncertainties that overshadowed the outlook in recent meetings have abated. The government budget was generally well received, but implementation risks remain. While the recent sovereign ratings outcome was positive for the rand, further sustained appreciation of the local currency is not expected. The exchange rate is currently assessed to be less of a risk to the inflation outlook. However, the rand will remain sensitive to a faster pace of normalisation in the advanced economies, possible heightened global financial market volatility, as well as domestic developments. 

The MPC was of the view that, in light of the improved inflation outlook and the moderation in risks to the forecast, there was some room to provide further accommodation without undermining the inflation trajectory or the downward trend in inflation expectations. Accordingly, the MPC has decided to reduce the repurchase rate by 25 basis points to 6.5% with effect from 29 March 2018. Four members preferred a reduction while three members preferred an unchanged stance.




Tuesday March 20 2018
South Africa Inflation Rate Slows to Nearly 3-Year Low
Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The consumer price index in South Africa increased 4 percent year-on-year in February of 2018, easing from a 4.4 percent rise in January and below market expectations of a 4.2 percent gain. It was the lowest inflation rate since March of 2015.

Year-on-year, prices slowed mostly for: transport (3.2 percent vs 4.4 percent in January), mainly fuel (5.1 percent vs 9.1 percent) and food (3.9 percent vs 4.5 percent), led by lower cost of meat (11.4 percent vs 13.4 percent); vegetables (1.3 percent vs 1.6 percent) and fruit (-4.3 percent vs -3.6 percent). Also, prices advanced less for: miscellaneous goods and services (6.2 percent vs 7 percent); recreation and culture (0.5 percent vs 0.7 percent); clothing and footwear (1.6 percent vs 1.7 percent) and restaurants and hotels (3 percent vs 3.6 percent).

In contrast, cost rose faster for: housing and utilities (4.5 percent vs 4.4 percent); alcoholic beverages and tobacco (6.1 percent vs 5.3 percent) and household equipment (1.9 percent vs 1.5 percent).

Annual core inflation rate, which excludes cost of food, non-alcoholic beverages, petrol and energy, was unchanged at 4.1 percent in February of 2018. Figures came in line with market expectations and remained the lowest inflation rate since December 2011. Compared to January, core consumer prices inched up 1.1 percent, quickening from a 0.2 percent rise and slightly below market consensus of a 1 percent gain.

On a monthly basis, consumer prices rose 0.8 percent, compared to a 0.3 percent increase in January, but below market expectations of a 0.9 percent gain.


Tuesday March 06 2018
South Africa GDP Grows 1.5% YoY, Strongest Since 2015
Statistics South Africa | Stefanie Moya | stefanie.moya@tradingeconomics.com

The South African economy advanced 1.5 percent year-on-year in the fourth quarter of 2017, above an upwardly revised 1.3 percent growth in the previous period and beating market expectations of 1.4 percent. It is the strongest expansion since the first quarter of 2015 supported by a rebound in manufacturing and utilities and strong growth in services.

Higher growth rates were seen for mining (4.9 percent compared to 3.5 percent in Q3); transport, storage and communication (1.6 percent compared to 1.1 percent) and finance, real estate and business services (2.1 percent compared to 1.9 percent). Additionally, output rebounded for manufacturing (2.5 percent compared to -0.4 percent); elecricity, gas and water (1.9 percent compared to -0.6 percent) and trade, catering and accommodation (0.1 percent compared to -0.8 percent).

On the other hand, slower growth rates were seen for agriculture (1.1 percent compared to 27.3 percent); personal services (0.8 percent compared to 1.6 percent) and government services (0.1 percent compared to 0.2 percent). Also, construction declined faster (-1.2 percent compared to -0.1 percent).

On a seasonally adjusted quarterly basis, the economy expanded an annualized 3.1 percent, following an upwardly revised 2.3 percent growth in the prior quarter and beating market consensus of 1.8 percent. The main contributors to growth were agriculture, internal trade and manufacturing.

Considering 2017 as a whole, the economy advanced 1.3 percent after a 0.6 percent growth in 2016. 





Tuesday March 06 2018
South Africa GDP Growth Strongest Since 2016
Statistics South Africa | Joana Taborda | joana.taborda@tradingeconomics.com

The South African economy advanced an annualized 3.1 percent on quarter in the last three months of 2017, following an upwardly revised 2.3 percent rise in the previous period and beating market expectations of 1.8 percent. It is the strongest growth rate in six quarters, mainly due to a robust gain in agriculture, a rebound in internal trade and a faster increase in manufacturing.

Agriculture made the largest upward contribution to GDP growth, up by 37.5 percent, following a 41.1 percent jump in Q3, mainly due to higher production of animal products. Other positive contributions came from: trade, catering and accomodation (4.8 percent compared to -0.1 percent), namely wholesale, retail and motor trade; manufacturing (4.3 percent compared to 3.7 percent), namely food and beverages, petroleum, chemical products, rubber and plastic products; basic iron and steel, non-ferrous metal products, metal products and machinery. Also, strong growth was reported for; finance, real estate and business services (2.5 percent compared to 1.9 percent), namely financial intermediation and auxiliary activities; transport, storage and communication (2.8 percent compared to 0.8 percent), namely land freight transportation and communication services; government services (1.4 percent compared to 1.1 percent); and electricity, gas water (3.3 percent compared to -6.1 percent). On the other hand, contraction were seen for mining (-4.4 percent compared to 6.2 percent), largely due to lower production of gold and platinum group metals; and construction (-1.4 percent compared to -1.2 percent), due to both residential and non-residential buildings.

Year-on-year, the GDP grew 1.5 percent, following an upwardly revised 1.3 percent growth in Q3 and beating forecasts of 1.4 percent. It is the highest growth rate since the first quarter of 2015.

Considering full 2017, the GDP advanced 1.3 percent, above 0.6 percent in 2016. A rebound was seen in agriculture, fishing and forestry (17.7 percent compared to -10.2 percent in 2016) and in mining and quarrying (47.6 percent compared to -4.2 percent). In contrast, contraction was observed in trade, catering and accomodation (-0.6 percent compared to 1.7 percent), manufacturing (-0.2 percent compared to 0.9 percent) and construction (-0.3 percent compared to 1.1 percent).




Wednesday February 28 2018
South Africa Trade Deficit Hits Record High
South African Revenue Service | Stefanie Moya | stefanie.moya@tradingeconomics.com

South Africa trade balance shifted to ZAR 27.7 billion deficit in January of 2018, compared to a downwardly revised ZAR 15.31 billion surplus in the previous month, and well below market expectations of a ZAR 5.0 billion deficit. It was the highest trade deficit on record.

Exports declined 22.6 percent month-over-month to ZAR 80.5 billion in January of 2018, mainly due to decreases in precious metals and stones (-34 percent); mineral products (-21 percent); vehicles and transport equipment (-47 percent); machinery and electronics (-21 percent) and prepared foodstuff (-27 percent). The most important export partners were: China (9.5 percent of total exports); the US (7.0 percent); Germany (5.9 percent); India (5.3 percent) and Japan (5.0 percent). 

Imports increased 18.3 percent month-over-month to ZAR 108.2 billion, namely original equipment components (139 percent); precious metals and stones (137 percent); mineral products (21 percent); machinery and electronics (10 percent); base metals (56 percent); chemical products (15 percent); plastics and rubber (32 percent) and textiles (39 percent). Main import partners were: China (20.4 percent of total imports); Germany (9.5 percent); Saudi Arabia (6.8 percent); the US (5.0 percent) and India (4.2 percent). 

Excluding trade with neighboring Botswana, Lesotho, Namibia and Swaziland, the country posted a trade deficit of ZAR 33.8 billion in January swinging from a ZAR 7.5 billion deficit in December.


Wednesday February 21 2018
South Africa January Inflation Rate Lowest Since 2015
Statistics South Africa | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Inflation rate in South Africa fell to 4.4 percent in January of 2018 from 4.7 percent in December, slightly below market expectations of 4.5 percent. It was the lowest reading since March 2015, as prices increased less mostly for transport and food. Meantime, inflation was steady for housing and utilities. Also core inflation declined to 4.1 percent, the lowest in over 6 years.

Year-on-year, cost advanced less for transport (4.4 percent vs 6.4 percent in December), mainly fuel (9.1 percent vs 14.2 percent) and food (4.5 percent vs 4.8 percent), amid lower prices of bread and cereals (-5.1 percent vs -5 percent); oils and fats (-3.4 percent vs -2.6 percent); fruit (-3.6 percent vs -4.2 percent) and milk and dairy products (4.2 percent vs 4.8 percent). Also, cost rose at the same pace for housing and utilities (4.4 percent) while eased for miscellaneous goods & services (7 percent vs 7.1 percent); furnishings (1.5 percent vs 1.7 percent) and clothing & footwear (1.7 percent vs 1.8 percent).

Meanwhile, prices continued to climb for: alcoholic beverages & tobacco (5.3 percent vs 4.9 percent); recreation & culture (0.7 percent vs 0.4 percent); restaurants & hotels (3.6 percent vs 3 percent) and health (6 percent vs 5.7 percent).

Annual core inflation rate, which excludes cost of food, non-alcoholic beverages, petrol and energy, decreased to 4.1 percent in January of 2018 from 4.2 percent in December. This compares with market expectations of 4.2 percent and remains the lowest rate since December 2011. Compared to December, core consumer prices went up 0.2 percent from a 0.3 percent gain, below market consensus of a 0.3 percent gain.

On a monthly basis, consumer prices rose 0.3 percent, following a 0.5 percent increase in December, matching market expectations.