South Africa: Slower expansion

This year’s economic slowdown is projected to continue, reflecting weaker consumption growth and worsening terms of trade. Real GDP growth is expected to fall to about 3% in 2009 before rebounding to above 4% in 2010, with the FIFA World Cup providing a fillip to activity. Inflation is expected to turn down, returning to the central bank’s target range in 2010, as a result of the monetary tightening over the past two years and falling food and energy prices. Current account deficits will remain large with lower export prices broadly offsetting weaker import volume growth.
The projected move back into budget deficits is not worrisome, but fiscal policy should more than claw back the cyclical easing over the medium term, in order to get to cyclically adjusted balance. Monetary policy should continue to focus on price stability, but with food and energy prices falling, some easing may be possible earlier than previously envisaged. Prospects for long-term growth and meeting official employment targets would be improved by strengthening product market competition, with lighter regulation and less costly compliance being high priorities.


Economic data

GDP growth: +0.3% Q3 2019
Consumer price inflation: 1.8 % Nov 2019 annual
Trade (G20): -0.7% exp, -0.9% imp, Q3 2019
Unemployment: 5.1% November 2019
Last update: 15 January 2020

OECD Observer Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Subscribe now

<b>Subscribe now!</b>

Have the OECD Observer delivered
to your door



Edition Q2 2019

Previous editions

Don't miss

Most Popular Articles

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2020