巴黎银行-新兴市场-宏观策略-南非三季度GDP：缓慢增长-20181204-7页_921kb

South Africa Q3 GDP Summary

Core Content

This report provides an analysis of South Africa's economic performance in the third quarter of 2018, focusing on GDP growth, market outlook, and policy implications. It is issued by BNP Paribas and serves as a market communication, not independent investment research.

Key Messages

• GDP Growth Recovery: South Africa exited recession in Q3, with GDP growth reaching +2.2% q/q (saar) and +1.1% y/y, up from a revised 0.4% contraction in the previous quarter.
• Drivers of Growth: The recovery was mainly driven by:
  • An end to the drought in the agriculture sector (+6.5% q/q).
  • Improved trade performance (+3.2% q/q).
  • Better financial services (+2.3% q/q).
• Mining Drag: The mining sector was the largest drag on growth, recording -8.8% q/q.
• Growth Forecasts: The report maintains below-consensus growth forecasts of 1.4% for 2019 and 1.5% for 2020, approximately 0.5 percentage points below the market consensus.
• Downside Risks: These include:
  • The strength of global economic headwinds.
  • The prolonged electricity supply constraints due to Eskom's coal shortages and maintenance backlogs.
• Inflation and Monetary Policy Outlook: A persistent negative output gap is expected to keep inflation low and monetary policy action subdued in 2019. The forecast for CPI inflation is 5.2% in 2019, with only one more rate hike expected in March.
• Policy Uncertainty: Policy and political uncertainty are likely to persist into H2 2019, especially regarding land policy and the outcome of the May 2019 elections, which could affect the ANC's support and lead to more populist policies.

Market Views

• Investment Decline: Gross domestic fixed investment continued to contract for the third consecutive quarter (-5.1% q/q), reflecting ongoing policy challenges and low investor confidence.
• Fiscal Risks: Fiscal risks are expected to worsen due to rising debt ratios and increased government support for struggling state-owned entities.
• Credit Ratings Risk: Sovereign credit ratings risk is likely to increase in 2019.
• Productivity and Labour Market Concerns: The growth outlook is constrained by issues related to productivity and the labor market, as shown in Fig. 2.
• Non-Independent Research: The report is non-independent research and may be subject to conflicts of interest, as it is prepared for marketing purposes.

Legal and Regulatory Disclosures

• Confidentiality: The document is intended for the use of specific recipients and must not be copied, reproduced, or distributed without prior written consent.
• No Investment Advice: BNPP does not provide investment, financial, legal, or tax advice, and the content should not be relied upon as a substitute for independent judgment.
• Market Makers and Conflicts of Interest: BNPP may act as a market maker or have conflicts of interest due to its involvement in investment banking, underwriting, or advisory services.
• Regulatory Compliance:
  • In the UK, the document is communicated by BNPP London Branch, which is authorized and regulated by the ECB, ACPR, and FCA.
  • In France, the report is distributed by BNPP SA and BNPP Arbitrage, both authorized and supervised by the ECB and ACPR.
  • In Germany, it is distributed by BNPP Niederlassung Deutschland, authorized by the ECB and ACPR, and subject to limited regulation by BaFin.
  • In Belgium, it is distributed by BNPP Fortis SA/NV, authorized by the ECB and the National Bank of Belgium.
  • In Ireland, it is distributed by BNPP S.A., Dublin Branch, authorized by the ECB and ACPR.
  • In Italy, it is distributed by BNPP Succursale Italia, authorized by the ECB, ACPR, and CONSOB.
  • In Netherlands, it is distributed by BNPP Fortis SA/NV, Netherlands Branch, authorized by the ECB, National Bank of Belgium, and AFM.
  • In Portugal, it is distributed by BNPP - Sucursal em Portugal, authorized by the ECB, ACPR, and Banco de Portugal.
  • In Switzerland, the report is distributed from Geneva, with the same legal framework as other jurisdictions.

Conclusion

The South African economy showed signs of recovery in Q3 2018, but this growth is expected to remain modest and is not indicative of a significant rebound. Policy and political uncertainty, particularly around land reform and the 2019 elections, are likely to continue affecting investment and economic activity. The growth outlook for 2019 and 2020 remains below consensus, with inflation expected to stay low and monetary policy to remain accommodative. The report serves as a marketing communication and is not investment research, highlighting the importance of due diligence and independent evaluation by recipients.