First-quarter GDP figures will reflect load-shedding but not the full effect of coronavirus lockdown
Economic growth and current account data for the first quarter will be the main focus this week. Though too backward-looking to reveal the effect of the pandemic, the data is likely to show that the recession was entrenched before the virus struck.First National Bank predicts the figures will show that SA remained in recession, with a real GDP growth contraction of 2.6% quarter on quarter on a seasonally adjusted and annualised basis.
BNP Paribas economist Jeff Schultz expects first-quarter GDP to have contracted by 3.8% quarter on quarter, mainly due to negative performances by mining, manufacturing, utilities and construction linked to electricity supply disruptions. Private sector credit extension data will also be released on Tuesday. Household credit appetite has been moderating since December 2019 and, in April, slowed to 7.4% year on year from 7.7% year on year in March.
The Absa manufacturing purchasing managers’ index and new-vehicle sales data, both for June, will be released on Wednesday. Investec expects that new-vehicle sales continued to contract in June, albeit at the slower rate of 48% year on year compared with the 68% year-on-year contraction recorded in May.
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