There are many fingers pointing to a possible recession in South Africa before the end of year, and the GDP data expected out at 11am this morning will likely fuel the doubters. The numbers aren’t positive and Dwaine van Vuuren digs into various data points that have been released recently. According to a simple Arima forecast, quarter-on-quarter GDP growth will be negative but Van Vuuren says the range is likely to be somewhere between -1 and 1 percent. – Stuart Lowman
By Dwaine van Vuuren*
Stats SA will for the first time tomorrow at 11am , release GDP figures produced by them from both the income and expenditure side of the accounts. They are taking the job over from the Reserve Bank which just produced GDP data from the expense side.
This probably hails a welcome new era in more accurate GDP reporting for SA, especially important since the economy is the main metric the ratings agencies are using to measure our credit status.
The latest Eskom electricity figures, with cumulative 2016 4-month YTD total electricity output at 5 year lows, points to a subdued 1Q2016 GDP print today:
Similarly, the SA Business Cycle Index, now in its 28-month of contraction, hints at a subdued GDP 1Q16 print:
The RMB SA Business Confidence index, now at 7-year lows, also points to a likely subdued GDP print:
The annual GDP growth rates so far paint a bleak picture under the Zuma presidency and highlight the mammoth task ahead of us to avoid a Junk rating in December 2016:
A simple ARIMA forecast of quarter-on-quarter GDP growth points to a negative GDP print for 1Q2016 tomorrow, but it is likely to be in the -1% to 1% region although a wide -4% to +2% is the 90% confidence range, given that quarterly GDP prints are notoriously hard to forecast.
- Dwaine van Vuuren has a BSc(Hons) degree and is a full-time trader, global investor and stock-market researcher. His passion for numbers and keen research & analytic ability has helped grow RecessionALERT.com and PowerStocks.co.za into companies used by hundreds of hedge funds, brokerage firms, financial advisers and private investors around the world. He now also heads up Research at Sharenet. A gifted educator, he’ll have you trading and investing with confidence & discipline. You can see Dwaine on his regular national roadshows by booking www.sharenet.co.za/events.
