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Swaziland Country Risk Report Q4 2018

Swaziland Country Risk Report Q4 2018

Swaziland's political environment will deteriorate over the coming months as fiscal pressures and faltering economic growth will lead to unpredictable policy decisions and an increase in public frustrations. While the prospects of the latter leading to widespread unrest are relatively remote given the king's tight stran-glehold on power, an Arab Spring-like spontaneous outburst of public anger cannot be completely discounted.

Weaker growth in South Africa will weigh on demand for Swaziland's exports and on government spending via lower revenues from the regional customs union. Although the latter will only be felt in 2019, given the lag between revenue collection and disbursement, the dire state of Swaziland's fiscal accounts mean that fiscal policy will place a drag on growth in 2018 too.

Swaziland's fiscal deficit will remain sizable over the next decade due to waning Southern African Customs Union revenues. Elevated financing needs will see government debt rise in the years ahead, leading to a significant deterioration in debt sustainability.

Swaziland's current account balance will deteriorate over the next decade due to declining Southern African Custom Union receipts. While external debt will remain low as a percentage of GDP, sovereign risks will rise due to the government's weakening ability to repay its obligations.

Key Risks

Swaziland remains susceptible to adverse weather conditions and any negative weather shocks will lead to inflationary pressures.

The government's weak fiscal position poses risks to debt sustainability. Should the government not rein in expenditures in order to offset waning revenues, Swaziland could experience difficulties in repaying its debt obligations.

Rampant poverty, suppression of political opposition and weak democratic processes could see social unrest rise over the next several years.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Headwinds For Swaziland Economic Growth From South Africa Underperformance
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: TOP FIVE GOODS EXPORTS IN 2016
TABLE: TOP FIVE GOODS IMPORTS IN 2016
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
10-Year Forecast
Swaziland's Economy To 2027
Economy Set To Experience A Lost Decade
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Swaziland Country Risk Q4 2018ContentsPolitical Outlook
Domestic Politics
Policy And Stability Risks To Rise In Swaziland
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Discontent To Rise
Global Macro Outlook
Pressure On EM Grows, As Do Divergences
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: SWAZILAND – MACROECONOMIC DATA & FORECASTS

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