Positive tourism showing expected

ECONOMIC WEEK AHEAD

NON- STATISTICS South Africa (Stats SA) data releases will dominate the calendar next week even though there are many Stats SA releases due as well, as the week has both month-end and start-ofthe-month data releases.

The week starts off with the Stats SA data on April liquidations and March insolvencies. This data shows how much stress companies and individuals are under. The good news in the first quarter was that both liquidations and insolvencies showed year-on-year (y/y) declines and this should continue in Monday’s release.

The March tourism data on Tuesday should show a strong y/y increase as Good Friday shifted into March this year from April last year. This shift was reflected in the visitor data for Mauritius which showed a 5.8% y/y fall in April after rising by 8.7% y/y in March.

The 2016 Stats SA data on marriages and divorces on Wednesday will show whether South African couples are confident enough about the future to make a long-time commitment. Economic hardship resulted in a 26% decline in the number of marriages between 2008 and 2015 to 138 627.

On Wednesday we will also have the non-Stats SA data releases of April money supply and April government finances. Economists expect a rise in credit to boost money supply growth, but the large provisional financing data points to a big fiscal deficit.

Broad M3 money supply growth eased to 6.42% y/y in March from 6.89% y/y in February, but economists expect a jump to the 7% level in line with a jump in narrow M0 money supply growth to 7.62% y/y in March from 5.69% y/y in February. Credit demand recovered to 4.52% y/ y in March and a y/y rise near 5% is expected for April.

On Thursday we have the Stats SA data releases on April producer inflation and April electricity supply and demand, as well as the foreign trade data from the South African Revenue Service. Producer inflation eased to 3.7% y/y in March from 4.0% y/y in February, but a rise to the 4% level is expected in April. The Easter shift impacted on electricity demand with a 0.1% y/y fall in March and economists expect a 1% y/y rise in April.

The week ends with the start of the month non-Stats SA data with the May Purchasing Managers’ Index for the manufacturing sector and the May new vehicle sales data.

The Absa/Bureau for Economic Research manufacturing index rose to 50.9 in April and economists expect it will remain above 50 in May. The National Association of Automobile Manufacturers of SA’s new vehicle sales are expected to have a y/y gain for the third consecutive month in May.