Entries for 'South Africa'
October 23, 2019
Investors finished the IMF/WB meetings on a less negative note. Concerns remain, but fewer worried about the risk of a recession. Monetary easing and a US-China trade deal would be supportive. Barring surprises from the Dollar, modest flows to EM are likely. The IMF's integrated policy framework remains a key topic for EM.
October 2, 2019
South Africa’s debt could reach as high as 95% of GDP in a pessimistic scenario. Low growth, high interest payments, and a decade of mismanagement are at fault. SOEs are a drain on public finances, and Eskom alone could add 6pp to debt. Mitigating factors are SARB independence, limited FX debt, and long maturities. Moody’s may put SA on negative watch but keep the IG rating for a little longer.
July 26, 2019
Weak growth will weigh on tax revenues, leading to sizable revenue shortfalls, while the frontloading of financial support to Eskom will cause spending overruns. Taken together, the fiscal deficit will far exceed the government’s targets. This increases the risk of a rating downgrade by Moody’s to non-investment grade status.
July 22, 2019
Labor shortages and fragile investor confidence will constrain output growth. Policies will likely become more accommodative, thanks to a dovish ECB and Fed. The external financing and inflation outlook will remain challenging for some. Slow progress in addressing structural problems will intensify vulnerabilities.
April 16, 2019
South Africa’s current account deficit remains wide, and foreign investor positioning is the heaviest in EM. Reserves to deal with these vulnerabilities are limited. High private external assets provide some buffers, as repatriation offsets non-resident outflows partially. External vulnerability is high despite additional buffers.
April 10, 2019
We recently returned from a research trip to South Africa where we met policymakers, analysts, rating agencies, and local asset managers. This note summarizes our key takeaways from the trip.
February 22, 2019
South Africa’s Budget 2019 includes adjustments, which are markedly offset by sizable bailout funding for Eskom, leaving the government’s deficit targets to widen compared to those presented last October. The worsening fiscal position and rising public debt are key risks for the credit rating.
October 16, 2018
We turned more positive on the EM complex recently, "¦ while flagging concentration risk in South Africa and others. We assess how vulnerable South Af
March 13, 2018
Recent political changes and policy adjustments have improved investor and consumer sentiment.' Fiscal policy is focused on deficit reduction, which c
December 8, 2017
South Africa avoided a potentially damaging ratings downgrade from Moody's in November, but has been put on watch for a downgrade in the next three mo
November 2, 2017
The fiscal picture has worsened - government debt is now projected to reach nearly 60% of GDP in FY2020/21 and the primary balance remains in deficit,
October 26, 2017
Despite South Africa's immense natural resource wealth, the mining sector's contribution to GDP con-tinues to slide Unease over the new mining charter
July 10, 2017
The net IIP has turned positive, driven by a surge in outward direct investment over the past decade. However, net portfolio debt liabilities and the
July 6, 2017
South Africa's current account deficit has become more entrenched over the past decade. A larger income deficit now outweighs improvements in trade fr
June 16, 2017
Inflation is back in its target range, driven lower by moderation in food prices, and we expect it to hover around 5% in H2 2017. In the absence of a
June 13, 2017
Politics will keep exchange rate volatile this yea
June 8, 2017
South Africa fell into technical recession in Q1. But growth accelerated on a y/y basis and will still be higher in 2017 than in 2016. Prospects for a
April 6, 2017
Eyes back on central banks' Potential for political upset in France South Africa - downgraded amid heightened political risk Czech Republic - a new er
February 26, 2017
Given the political tightrope he was walking, we think that Minister Gordhan delivered a commendable budget for 2017, striking a delicate balance betw
February 17, 2017
South Africa is facing what could be a watershed year in 2017. In December, the ANC elects a new leader who will likely set the agenda for the party l