Africa finance summit dominates a data-rich week
A slew of economic data comes out this week with the main focus on the unemployment rate, the Africa finance industry summit and private sector credit extension data.
African ministers of finance and governors of central banks meet in Lomé in Togo on Monday and Tuesday to discuss how industries can contribute to its economic recovery.
They will look for strategic fiscal measures for curbing inflation without disrupting growth and maintaining independence amid high interest rates and growing debt, as well as how to mitigate the effects of a global recession on the continent’s financial industry.
Stats SA will release the Q3 labour force quarterly survey on Tuesday. SA’S jobs growth defied expectations in Q2, pushing the unemployment rate a step closer to pre-pandemic levels as the easing of Covid-19 restrictions sparked a bout of hiring by employers looking to serve consumers who are eating out, shopping and travelling more. Q2 figures came as a surprise — with the survey showing that the economy created 647,651 jobs in the three months to endjune — given that the economy was broadly expected to have performed poorly at the time due to the Kwazulu-natal flooding which devastated one of the country’s transport hubs, as well as load-shedding and depressed business confidence.
Stats SA reported that the official unemployment rate fell
SA’S jobs growth defied expectations in Q2, pushing the unemployment rate a step closer to pre-pandemic levels as the easing of Covid-19 restrictions sparked a bout of hiring by employers
to 33.9% from 34.5% in Q1, well below the median forecast of 35% by five economists surveyed by Bloomberg.
Economists warned that SAS ’ jobless rate could reach 40% by the end of the decade, causing societal breakdown, as well as stability risks associated with protests and unrest as millions of adults become excluded from economic life. Investec economist Lara Hodes expects Q3 joblessnes to remain at 33.6%.
On Tuesday, the SA Reserve Bank will release the private sector credit growth data for October. It surged in September, increasing by 9.7%y/y, defying expectations and rising at its fastest pace in seven years.
While there are signs that consumers are feeling the strain of higher borrowing costs and rampant inflation, businesses seem less affected as demand recovers from low levels and sweeping energy reforms unleash new credit demand for investment spending.
SARS will release data on the trade balance on Wednesday. SA recorded a trade balance surplus of R19.70bn in September — well above August’s R7.2bn, the smallest in seven months — and above the Thomson Reuters consensus of a R5bn surplus.
Absa’s manufacturing PMI for November will be published on Thursday. It settled at a neutral level of 50 index points in October, up from 48.2 points the previous month.
This was a positive start to Q4, after the 49.6 points average in the previous quarter.