1. Market Research
  2. > Automotive
  3. > Motor Vehicle Market Trends
  4. > South Africa Business Forecast Report Q2 2014

South Africa Business Forecast Report Q2 2014

  • January 2014
  • -
  • Business Monitor International
  • -
  • 47 pages

Core Views

BMI sees the South African economy posting tepid growth over the
medium term, with real GDP expanding by just 2.5% in 2014. Our
below-consensus view is predicated on several factors including
tepid investment sentiment and the ongoing retrenchment in the
domestic gold mining sector.
The South African Reserve Bank (SARB) continues to face a difficult
dilemma in its monetary policy deliberations. Inflation is facing upside
pressure from the weak rand and economic growth is lacklustre – which
together put the central bank in a stagflationary bind wherein neither
a rate hike nor a rate cut is a palatable option. This being the case,
we expect the repo rate to be kept on hold at 5.00% through 2014.
South Africa's current account deficit will remain sizeable over the
coming years, with BMI predicting that it will remain over 5.0% of GDP
in 2014. Inflows to the capital and financial account have propped up
the balance of payments in recent years, but with investor appetite
for South African bonds waning, this trend can no longer be assured.
The ANC's dominant position is coming under threat ahead of
legislative polls in April 2014. Dissatisfaction is rising among poor
black South Africans who form the majority of the population, and
opposition parties are growing in popularity and number. We expect
the opposition to gain an increased share of the vote at the polls,
although the ANC will win the election.

Major Forecast Changes

No Major Forecast Changes

Key Risks To Outlook

A sustained bout of global risk aversion with an attendant sharp
outflow of portfolio funds. This would threaten South Africa's precarious
balance of payments.
A sudden uptick in domestic political risk, such as an escalation of
the industrial unrest that blighted various sectors in 2013.
A sustained period of high oil prices would exacerbate the already
sizeable current account deficit.

Table Of Contents

South Africa Business Forecast Report Q2 2014
Executive Summary 5
Core Views 5
Major Forecast Changes 5
Key Risks To Outlook 5
Chapter 1: Political Outlook 7
SWOT Analysis 7
BMI Political Risk Ratings 7
Domestic Politics 8
ANC And Zuma Losing Popularity, Fast 8
Dissatisfaction with the ruling African National Congress and President Jacob Zuma is being expressed more vocally following the
passing away of Nelson Mandela We expect the ANC's share of the vote to drop to 55-60% at the April 2014 elections Zuma will likely
win the presidential election but be ousted at a later date, potentially by the end of 2014
TABLE: Political Overview  8
Long-Term Political Outlook 10
Political Trials And Tribulations Over The Coming Decade 10
Many issues threaten South Africa's political stability over the long term, not least the inequalities still stemming from the apartheid era
and the foreign policy challenge of Zimbabwe Although our core scenario envisages no major change to the political backdrop, we
present a number of alternative scenarios
Chapter 2: Economic Outlook 13
SWOT Analysis 13
BMI Economic Risk Ratings 13
Tepid Growth Ahead 14
We expect relatively weak real GDP growth in South Africa over the medium term, forecasting economic expansion of 2 5% in 2014
and 3 1% in 2015 Our view is predicated on a slowdown in consumer spending, troubles in the gold mining sector and tepid investor
TABLE: Real GDP Growt h, % chg q-o-q, SAAR 14
Sub-National Analysis: Which Provinces Will Outperform? 16
Although South Africa's nine provinces should be fairly evenly matched in terms of real GDP growth over the long term, there will be
some minor variation We expect Northern Cape, Limpopo, North West and Mpumalanga to outperform, largely on account of natural
TABLE: Nominal GDP, ZAR (mn ) 17
TABLE: GDP Per Capita, ZAR 18
Monetary Policy 19
Rate Hike Talk, But No Action Ahead 19
Although the South African Reserve Bank is emphasising the upside risks to inflation stemming from potential rand depreciation, we
maintain our forecast that the repo rate will stay on hold at 5 00% through 2014 Unless inflation moves above 6 00% on a sustained
basis, the central bank will be reluctant to hike rates amid sluggishness in the domestic economy
Fiscal Policy 21
Accommodative Fiscal Policy To Continue 21
We forecast that South Africa's budget deficit will remain fairly wide, at 4 6% of GDP in fiscal year 2014/15 Our projections are
somewhat more pessimistic than the National Treasury's, owing to a more downbeat view on economic growth
Business Monitor International Ltd www businessmonitor com 3
Chapter 3: 10-Year Forecast 23
The South African Economy To 2023 23
Structural Constraints To Curb Long-Term Growth 23
While we forecast relatively stable real GDP growth rates over the coming 10 years, ongoing structural shortcomings will continue to
limit South Africa's long-term growth potential High unemployment and powerful trade unions present key challenges to the authorities
TABLE: Long -Term Mac roec onomic Forecasts 23
Chapter 4: Business Environment 25
SWOT Analysis 25
BMI Business Environment Risk Ratings 25
Institutions 26
Infrastructure 29
Market Orientation 30
TABLE: Top Export Destinations, 2004-2011 31
Operational Risk 32
Chapter 5: Key Sectors 33
Autos 33
TABLE: Aut omoti ve Sales - Hist orical Data and Forecasts 34
TABLE: Aut omoti ve Producti on - Hist orical Data and Forecasts 35
Food and Drink 36
TABLE: Food Consumpti on Indicat ors - Hist orical Data and Forecasts , 2010-2017 37
TABLE: Alc oholic Drinks Value /Volume Sales - Hist orical Data and Forecasts , 2010-2017 39
TABLE: MGR Sales By Format - Hist orical Data and Forecasts , 2010-2017 41
Other Key Sectors 43
TABLE: Oil and Gas Sect or Key Indicat ors 43
TABLE: Pharma Sect or Key Indicat ors 43
table : Sout h Africa Defence and Secu rity Sect or Key Indicat ors 43
TABLE: Telec oms Sect or Key Indicat ors 44
TABLE: Inf rast ructu re Sect or Key Indicat ors 44
TABLE: Freig ht TRansp ort sect or Key Indicat ors 44
Chapter 6: BMI Global Assumptions 45
Global Outlook 45
Momentum To Continue In H114 45
Table : Global Assumpti ons 45
Table : Devel oped States , Real GDP GrowtH , % 46
Table : Eme rging Markets , Real GDP Growt h, % 47

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Amrita

+1 718 303 2019

Purchase Reports From Reputable Market Research Publishers
Seat Markets in the World to 2020 - Market Size, Development, and Forecasts

Seat Markets in the World to 2020 - Market Size, Development, and Forecasts

  • $ 26 587
  • Industry report
  • August 2016
  • by Global Research & Data Services

The expansion of the global seat industry is forecast to reach 4.4% p.a. in the coming years. Between 2009 and 2015 the market increased with an average annual growth of 5.2%. Currently, aircraft seats ...

Global Tire Market Forecast & Opportunities, 2021

Global Tire Market Forecast & Opportunities, 2021

  • $ 12 000
  • Industry report
  • August 2016
  • by TechSci Research

Global tire market witnessed tepid growth during 2011-15, predominantly due to Eurozone Crisis and slump in the crude oil prices. These factors led to weak demand for tires across Europe and Middle-East, ...

Seat Markets in Europe to 2020 - Market Size, Development, and Forecasts

Seat Markets in Europe to 2020 - Market Size, Development, and Forecasts

  • $ 12 755
  • Industry report
  • August 2016
  • by Global Research & Data Services

The report package Seat Markets in Europe to 2020 - Market Size, Development, and Forecasts offers the most up-to-date industry data on the actual market situation, and future outlook for seats in different ...


Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.