Economy

LAGOS (Capital Markets in Africa) – The World Bank is the first key institution to cut its economic growth forecast for South Africa to below 1% for 2020 due to electricity supply concerns. It now expects the economy to expand by 0.9% this year, the Washington-based lender said Wednesday in its Global Economic Prospects report. That compares with an estimate of 1% in its Africa Pulse report released in October and is well below government forecasts. Its outlook for Africa’s most-industrialized…

ADDIS ABABA (Capital Markets in Africa) – The World Bank cut its forecast for Ethiopia’s economic growth in the 2020 fiscal year to 6.3%, well below the government’s projection. The National Bank of Ethiopia has forecast that gross domestic product growth would accelerate to 10.8% for the fiscal year ending in July, up from a 9% pace in fiscal 2019 as the government implements a blueprint expected to boost investment. Economic reforms by Prime Minister Abiy…

LAGOS (Capital Markets in Africa) – Ghana’s inflation rate rose to the highest level in four months in November as the cedi continued to weaken. Annual inflation quickened to 8.2% in from 7.7% in October, Government Statistician Samuel Kobina Annim told reporters in the capital, Accra, on Wednesday. The median estimate of three economists in a Bloomberg survey was 7.6%. Prices rose 0.7% in the month. Key Insights This is the first time since the…

CAIRO (Capital Markets in Africa) – Egypt’s inflation rate accelerated for the first time in five months, rising 3.6% in November as the effect of last year’s surge in prices faded but offering the central bank little reason to reverse a monetary easing cycle. The annual rate for urban inflation rose from 3.1% the month before, the state-run statistics bureau said Tuesday. Consumer prices fell 0.3% month-on-month from a 1% rise in October — its…

NEW YORK (Capital Markets in Africa) – If 2019 was the year the yield curve went mainstream, with an inversion sending a stark recession warning, then 2020 is already shaping up as a welcome return to normality. Nobody is willing to call the all-clear on the global economy yet given a trade deal between the U.S. and China is still to be reached. Even so, the prospect of longer-term yields stretching their premium over shorter…

JOHANNESBURG (Capital Markets in Africa) – South Africa could move deeper into junk territory as the nation looks set to lose the only stable outlook on its credit ratings this week. Of the 22 economists in a Bloomberg survey, 16 expect S&P Global Ratings to change its outlook on the country’s credit rating to negative on Friday. That means the next move from the company, which already assesses South Africa’s foreign-currency debt at two levels below…

JOHANNESBURG (Capital Markets in Africa) – For a quarter-century, South Africa has been able to count on an investment-grade rating from Moody’s Investors Service. Bond buyers lately may be forgiven for wondering why. Financial markets have been pricing in a downgrade for months, and the other two major rating companies have had South Africa at junk status for two years. Should Moody’s follow suit, the nation would suffer enormous financial consequences. For one, the country would lose its place…