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Research and Insights

  1. Slower credit growth, higher taxes and modest real income growth to act as constraints on household spending

    Annabel Bishop

    27 Feb, 2015

    Private sector credit extension increased at a pace of 9.2% y/y in January, compared to an 8.6% y/y rise in December. The lift in the annual growth rate was underpinned by faster growth in credit extension to corporates of 15.4% y/y versus a prior 14.0% y/y. Household loan growth moderated to 3.5% y/y from 3.7% y/y.

    1. A somewhat better than expected budget showing a reduction in projected net debt (% of GDP), consolidation of the deficit and reduction in expenditure growth – likely to prompt neutral to positive comments from the rating agencies

      Annabel Bishop

      26 Feb, 2015

      SA’s 2015 Budget shows lower than previously projected debt for the medium-term (net debt now projected at 43.7% in 2017/18 from a MTBPS estimate of 45.9% of GDP), while the fiscal deficit averages exactly 3.0% of GDP over the medium term. This should certainly placate the rating agencies, with the main budget primary balance reaching 0% in 2017/18, evidencing sustainable future government finances.

    2. PPI Snapshot - producer price inflation plunges 2.3% y/y on lower oil prices to 3.5% y/y; but CPI inflation is unlikely to see the same sharp drop on the month

      Annabel Bishop

      26 Feb, 2015

      PPI inflation dropped to 3.5% y/y in January, from 5.8% y/y the month before. It is likely to fall further this year on base effects, and the drop in commodity prices, nearing 1.0% y/y due to its heavy commodity bias.

    1. A somewhat better than expected budget showing a reduction in projected net debt (% of GDP), consolidation of the deficit and reduction in expenditure growth – likely to prompt neutral to positive comments from the rating agencies

      Annabel Bishop

      26 Feb, 2015

      SA’s 2015 Budget shows lower than previously projected debt for the medium-term (net debt now projected at 43.7% in 2017/18 from a MTBPS estimate of 45.9% of GDP), while the fiscal deficit averages exactly 3.0% of GDP over the medium term. This should certainly placate the rating agencies, with the main budget primary balance reaching 0% in 2017/18, evidencing sustainable future government finances.

    2. Government adheres to commitment of fiscal consolidation despite deterioration in GDP growth outlook

      Annabel Bishop

      26 Feb, 2015

      Against a backdrop of a fragile economic growth outlook and risks of further sovereign downgrades, the 2015 Budget continues to demonstrate a commitment to efforts of fiscal consolidation, a lowering of the budget deficit and stabilising debt levels.

    1. PPI Snapshot - producer price inflation plunges 2.3% y/y on lower oil prices to 3.5% y/y; but CPI inflation is unlikely to see the same sharp drop on the month

      Annabel Bishop

      26 Feb, 2015

      PPI inflation dropped to 3.5% y/y in January, from 5.8% y/y the month before. It is likely to fall further this year on base effects, and the drop in commodity prices, nearing 1.0% y/y due to its heavy commodity bias.

    2. Economies make progress despite deflation fears

      Philip Shaw

      26 Feb, 2015

      We maintain our view that we should see a pick-up in global growth this year; we forecast 3.7%. However we note that across the globe, more central banks appear to be treating deflation as a more serious threat as an increasing number of economies face the prospect of negative inflation over the months ahead.

    1. Week Ahead: Petrol price cuts to have continued dominating effect on CPI inflation in January, March will see this trend interrupted

      Annabel Bishop

      13 Feb, 2015

      Key data releases in the week ahead

       

      SA: CPI, Retail Sales
      US: FOMC Minutes, Empire State Manufacturing, Jobless Claims
      Euro zone: Flash Manufacturing PMI, Preliminary Consumer Confidence

    2. 2014 GDP slows to 1.5% from 2.3% previously on the underperformance of the industrial sector

      Annabel Bishop

      24 Feb, 2015

      In Q4.14, the economy produced growth of 4.1%, on a quarter on quarter seasonally adjusted annualised (qqsaa) basis, slightly stronger than market expectations of a 3.8% qqsaa rise.

    1. Week Ahead: 2015 Budget to provide insight into government policy

      Annabel Bishop

      24 Feb, 2015

      Key data releases in the week ahead

       

      SA: 2015 Budget, Q4.14 GDP, PPI, PSCE, Trade Balance
      US: Q4.14 GDP, CPI, PCE Price Index, Home Sales
      Euro zone: CPI, Business Confidence