South Africa Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
×

Sign up to download the South Africa Country Risk Report

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.

Thank you for your interest

You will shortly receive your free executive summary by email.

South Africa Country Risk Report
Product Price
$1,195.00

Core Views:

  • Growth will slow sharply in 2016, rebounding only slightly in 2017. We expect household expenditure growth to collapse, while government expenditure growth decelerates on the back of fiscal consolidation and gross fixed capital formation growth also slows given continued policy uncertainties.

  • We believe that the South African Reserve Bank (SARB) will tighten rates by another 50 basis points (bp) to 7.5% in Q3, given three sources of upside pressures on inflation: 1) the second-round effects of food price inflation, 2) exchange rate depreciation and an increased pass-through from the exchange rate to inflation and 3) a recovery in oil prices.

  • We expect South Africa's current account deficit to narrow marginally to 4.0% of GDP in 2016 from 2015's 4.4% as the trade deficit continues to narrow following the Q1 bottom in commodity prices. Given lower current account deficit financing needs and continued policy instability, we expect limited inflows of portfolio and foreign direct investment in 2016 after Q415 saw posted outflows.

  • The ANC will ramp up its populist rhetoric in the run-up to the 2016 municipal elections. Land reform in particular will resonate with the voters which the ANC is losing to the Economic Freedom Fighters. Yet the ANC is likely more preoccupied with Zuma's succession, as Nkosazana Dlamini-Zuma is displacing Cyril Ramaphosa as the strongest contender for the ANC leadership.

Major Forecast Changes:

  • We have revised down our forecast for South Africa's 2016 real GDP growth, from 0.7% to 0.5%. This would imply a more-than-halving of real GDP growth from 2015's 1.3%. Growth in Q116 was slower than we had anticipated. Meanwhile, slower growth in Europe due to the Brexit will also pose headwinds to the South African economy, weighing on financial market stability, and further tempering investment and trade.

Key Risks:

  • While the electricity situation has stabilised in the short term, in line with reduced demand driven by the economic slowdown, it is unclear how bad the electricity situation will be over the next few years as the current operational stability masks unresolved structural failures. In a worst case scenario where the domestic grid collapses, we would significantly revise down our growth forecast.

Forecast Table:

Macroeconomic Forecasts (South Africa 2014-2017)
Indicator 2014 2015 2016f 2017f
National Sources/BMI
Nominal GDP, USDbn 350.0 312.7 272.8 295.8
Real GDP growth, % y-o-y 1.6 1.3 0.5 1.2
Consumer price inflation, % y-o-y, eop 5.3 5.2 6.9 6.0
Exchange rate ZAR/USD, eop 11.55 15.48 15.90 15.85
Budget balance, % of GDP -3.6 -4.0 -3.5 -2.4
Current account balance, % of GDP -5.4 -4.4 -4.0 -4.4
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Faltering Investor And Consumer Confidence Will Undermine Economy
8
GDP By Expenditure Outlook
10
TABLE: GDP GROWTH FORECASTS
10
TABLE: PRIVATE CONSUMPTION FORECASTS
10
Balance Of Payments
11
Export Growth Still Faces Structural Obstacles
11
TABLE: GOVERNMENT CONSUMPTION FORECASTS
11
TABLE: FIXED INVESTMENT FORECASTS
11
TABLE: NET EXPORTS FORECASTS
11
Outlook On External Position
13
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE (USD)
13
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE (EUR)
13
TABLE: CURRENT ACCOUNT BALANCE FORECASTS (USD)
14
TABLE: CURRENT ACCOUNT BALANCE FORECASTS (EUR)
14
TABLE: TOP 5 GOODS IMPORTS
14
TABLE: TOP 5 GOODS EXPORTS
14
Monetary Policy
15
Inflation Reacceleration In H216 Will Prompt Further Tightening
15
Monetary Policy Framework
17
TABLE: MONETARY POLICY FORECASTS
17
Fiscal Policy And Public Debt Outlook
18
Slowing Provincial Revenue Risks Increased Unrest
18
Structural Fiscal Position
20
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
20
Currency Forecast
21
ZAR: Bounce Ahead, But Depreciation Thereafter
21
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
21
TABLE: BMI CURRENCY FORECAST
22
Chapter 2: 10-Year Forecast
25
The South African Economy To 2025
25
Underperformance Among EM Peers Ahead
25
TABLE: LONG-TERM MACROECONOMIC FORECASTS
25
Chapter 3: Political Outlook
29
SWOT Analysis
29
BMI Political Risk Index
29
Domestic Politics
30
Protests Suggest Uphill Battle For ANC In Tshwane Election
30
TABLE: POLITICAL OVERVIEW
30
Long-Term Political Outlook
31
Social Challenges Will Be A Persistent Threat
31
Chapter 4: Operational Risk
35
SWOT Analysis
35
Operational Risk Index
35
Operational Risk
36
TABLE: OPERATIONAL RISK
36
Market Size and Utilities Analysis
37
TABLE: SUB-SAHARAN AFRICA-MARKET SIZE AND UTILITIES RISKS
38
Labour Costs
41
TABLE: LABOUR REGULATIONS GOVERNING FLEXIBILITY OF WORKFORCE
42
Chapter 5:BMI Global Macro Outlook
45
Global Macro Outlook
45
Brexit Risk Casts A Long Shadow
45
TABLE: GLOBAL ASSUMPTIONS
45
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
46
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
47
TABLE: MACROECONOMIC DATA & FORECASTS
49

Assess your risk exposure in South Africa with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in South Africa with confidence.

Your subscription service includes:

  • Delivery of the report in print and PDF
  • Online access for 12 months
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
  • The ability to export data and graphs from the online report directly into your workflow
  • The support of a dedicated Account Manager to answer any questions you might have about your subscription
  • Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report