A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Apr 07 2015

Prospects for South African Economic Growth

With the consensus remaining pessimistic about the future of South Africa’s growth, the latest update to ECRI’s South African Long Leading Index shows whether or not the South African economy is gaining momentum.

In the midst of a weak global outlook two years ago, we reviewed the potential of Sub-Saharan Africa as an alternate source of growth showing it as a mixed bag, but with clearly improving prospects. More recently, South Africa’s economy has been struggling with frequent power outages and strikes in the mining sector. Indeed, GDP growth was a disappointing 1.5% in 2014, the weakest growth since its 2009 recession.
However, Q4 2014 GDP growth rose to 4.1% quarter-over-quarter, and with lower oil prices as well as a weaker currency boosting exports, there is potential for stronger growth in Africa’s second largest economy. Our analysis addresses the question of timing.

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