The two things you need to know in the economic week ahead
Opinion is divided on how consumers’ pockets fared in May, while the current account deficit is an important measure of SA’s economic health at a crucial juncture
There are two major economic data releases due out this week — consumer inflation for May and the current account deficit for the first quarter. Both will be scrutinised for clues as to whether SA’s economic recovery is gaining traction. 1. Consumer inflation: • BNP Paribas economist Jeff Schultz hopes for a moderation but Citi Bank economist Gina Schoeman expects CPI inflation to tick up to 4.7% year on year. • CPI inflation accelerated sharply to 4.5% in April, thanks to VAT rising to 15% from 14%. • Fuel prices rose 3.5% in May, which could push it higher. • Weak consumer demand could have a mitigating effect. 2. Current account deficit: • The deficit is expected to widen to 4% of gross domestic product, driven mainly by falling exports and rising imports. Why it matters: • Rate hikes and tighter monetary policy in major developed economies have increased pressure on countries with poor fundamentals, like SA. • SA’s current account and fiscal deficits are among the largest in its...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.