S&P Lifts South Africa’s 2021 GDP Growth Est. to 4.6%

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JOHANNESBURG (Capital Markets in Africa) – The main risks to the economic outlook for South Africa are a low vaccination rate and further lockdowns to curb the spread of coronavirus pandemic, S&P Global Ratings says Tuesday in emerging markets economic outlook.

  • Higher borrowing costs associated with tighter global financing conditions and spillover effects of Chinese property sector problems could weigh on demand for metals and also pose risks to outlook
  • Strict lockdown restrictions and deadly riots that erupted in key provinces in July are likely to lead to an economic contraction in the third quarter
  • “The economy is therefore rebounding, but we expect the pace of the recovery to slow in the coming quarters. The boost from improved terms-of-trade is fading away, while high unemployment and the risk of re-emerging lockdowns amid a slow vaccination progress will continue to hold back consumer and business confidence.”
  • Central bank seen leaving benchmark interest rate at record low 3.5% until beginning of 20
Seychelles Central Bank Maintains Benchmark Interest Rate at 2%
Seychelles’ central bank kept its key repo rate at 2%, after cutting it by 100 basis points in June, saying that despite a pick-up in output, the economy has yet to fully recover from the Covid-19 pandemic, Governor Caroline Abel tells reporters in Victoria, the capital.
  • “The message of the central bank is clear. We need to support the economy”: Abel
  • “Despite the prolonged uncertainties arising from the current environment, there are promising signs of a partial recovery, although it is still below pre-pandemic levels,” Central Bank of Seychelles says in emailed statement
  • Central bank concerned about high inflation; rising commodity prices and shipping costs have kept pressure on inflation
  • Central bank “disappointed” that realignment of interest-rate corridor in July has not been fully transmitted by banks
    • “If the banks do not act, the central bank will come forward with exceptional measures. The central bank will not negotiate. It will implement”: Abel
  • NOTE: Seychelles Annual Inflation Rate Falls to 10.5% in August
Morocco Central Bank Postpones Rate Decision to Oct. 13
Morocco’s central bank said Tuesday it had postponed a board meeting to discuss the benchmark interest rate until Oct. 13.
The bank, in a statement, cited unspecified “health” considerations. The meeting was scheduled to be held Sept. 28.

 

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