Sign in
Research link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services
Economics link-chevron Created with Sketch.
FX Report
The Loop
Inside China
Insights & Strategy
Equities link-chevron Created with Sketch.
Corporate Commissioned Research
Analysts
Analysts
Help and Support
Help and Support
Corporate and Investment Bank
Standard Bank Group
The SA Daily 05 September 2018

Sliding into recession

Shireen Darmalingam

  • Q2:18 GDP confirms that SA is in a technical recession. Q2 GDP contracted 0.7% q/q (saar), from a downwardly revised -2.6% q/q (saar) in Q1 (previously -2.2%). The disappointing H1:18 growth comes from a sharper-than-expected deterioration in the terms of trade, policy uncertainty, a less benign global backdrop, and possibly significant underspending by the SA government.
  • On the production side, there was contraction in the agricultural, government and trade sectors; on the expenditure side, household consumption expenditure declined particularly for durable goods, as did inventories and infrastructure spending.
  • Very brisk growth would be required in H2:18 to underpin even moderate full-year growth in 2018.
  • Due to the Q2 GDP contraction, we now trim our 2018 GDP forecast to 0.9%, from 1.2% previously.
  • However, the delayed government wage settlement (which should encourage consumer spending), a recovery in agricultural production as well as no further slippage in the terms of trade should aid growth in H2:18 (see our report GDP 2Q18: Recession of 04 September, by Elna Moolman).

Read PDF