South Africa: Q4 GDP growth expected to print 1.8% - Rabobank

South Africa’s economy is set to expand for the third consecutive quarter and the consensus is for an annualised 1.8% growth in Q4, suggests the research team at Rabobank.

Key Quotes

“Even more importantly, the prospects have improved after market friendly Cyril Ramaphosa became the leader of the governing ANC party in December and discredited President Zuma was forced to resign last month. There is a sense of optimism both amongst domestic and foreign investors that under the leadership of Ramaphosa the pace of urgently required economic reforms will accelerate. Structural reforms will lead to balanced and sustainable growth over the long-term horizon.”

“The outburst of optimism is reflected in an impressive appreciation of the South African rand, which rallied to the highest level in three years against the US dollar. The biggest risk to the rand and its EM peers is a much faster pace of tightening by the Fed. That said, a potential improvement in South Africa’s fundamentals would offer the rand a layer of insulation should the Fed seriously consider four instead of three hikes this year.”