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South Africa Country Risk Report 20 2018

South Africa Country Risk Report 20 2018

Despite having revised up our forecasts for real GDP growth, we maintain our relatively muted outlook for the South African economy on the back of ongoing obstacles to meaningful reform. To unlock a more sustainable and substantial recovery, President Cyril Ramaphosa will need to deliver on fiscal consolidation and meaningful improve-ments to the operating environment.

The pace of fiscal consolidation will remain slow in South Africa, despite the new administration having issued a more conservative 2018 budget and made a number of other positive steps that will please potential investors. Progress on more substantial reforms will remain difficult in the face of strong domestic political opposition.

The South African rand is set to strengthen even further on the back of optimistic investor sentiment and an attractive technical picture.

This very much depends on the continued strength of the global economy and reform momentum as any deterioration towards emerg-ing markets generally would add substantial downside pressure.


Executive Summary
Core Views
Major Forecast Changes
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
South African Growth Story Has Modest Upside Potential
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
External Trade And Investment Outlook
Current Account Deficit To Widen On Rand Strength
Outlook On External Position
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: TOP 5 GOODS IMPORTS IN 2016
TABLE: TOP 5 GOODS EXPORTS IN 2016
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Fiscal Policy And Public Debt Outlook
Initial Fiscal Progress Will Be Difficult To Sustain
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
Currency Forecast
ZAR: Volatility Does Not Preclude Broader Rand Strength
TABLE: BMI SOUTH AFRICAN RAND FORECASTS
Chapter 2: 10-Year Forecast
The South African Economy To 2027
Underperformance Among EM Peers Ahead
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Aggressive Land Expropriations Remain Unlikely
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Ongoing Social Divisions Undermine Long-Term Political Outlook
Chapter 4: Operational Risk
Operational Risk
TABLE: OPERATIONAL RISK
Business Crime
TABLE: BUSINESS RESPONSE TO RISK IN SOUTH AFRICA
Education
Chapter 5: BMI Global Macro Outlook
Trade Tensions Take Centre Stage
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: SOUTH AFRICA – MACROECONOMIC DATA & FORECASTS

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