Growth in Q4 2018 was published at +0.3% q/q. Key sectors were still on a moderate recovery track from a low starting point (South Africa experienced a recession in H1 2018). Manufacturing output in Q4 2018 was just back to the level in Q4 2017, after a very poor Q1 (-2.2% q/q). The domestic trade sector pattern also showed how weak domestic demand is since the value added in the sector decreased by -0.2% q/q in Q4. Construction activity was quite subdued as well, decreasing by -1.2% in 2018. But the main weakness was the renewed fall in mining and quarrying (-1.7% q/q; now -6.5% below the 2005 output peak). Electricity output (-4.4% below 2011 peak) also showed the bottlenecks that are preventing a genuine recovery in South Africa. GDP growth of +0.8% for all of 2018 is much too low to match population growth; and GDP per capita in 2018 was -2.4% below the 2014 level. Low investment expansion is expected to continue, as a result of problems at SOEs (e.g. Eskom) and GDP growth is likely to remain muted (+1% in 2019).
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Weekly Export Risk Outlook 6 March 2019