With Stats SA set to release mining and trade data this week, economists expect a clearer picture of how the economy fared in the third quarter.
“Mining is on a relatively strong streak, with five consecutive months of month-on-month gains,” said Bureau for Economic Research economist Tracey-Lee Solomon. “Another monthly expansion would bode well for the sector’s contribution to GDP in the third quarter.”
However, the momentum appears to be softening. Nedbank economists expect mining production growth to slow from 4.4% year on year in July to 0.7% in August. “Though operating conditions remain challenging, marginal improvements in logistics, with the absence of load-shedding, have provided some relief to the sector,” they noted. “Additionally, surging precious metal prices [are] likely [to have] offered further support.”
Retail trade sales, another large component of GDP, are also expected to moderate. In July, sales surged 5.6% year on year, but August is expected to come in closer to 3%. According to Nedbank, retailers “continue to benefit from strong consumer demand, underpinned by rising real incomes, subdued inflation and lower interest rates”.
Solomon added July’s retail print was “exceptionally strong”, but a pullback was likely. However, the broader picture remains relatively upbeat. “Continued strong growth in Naamsa vehicle sales means that Stats SA’s print for [the] motor trade should also remain robust in August,” she said.
The domestic data flow will be accompanied by a busy week of economic events, locally and internationally.
On Monday, financial services group PSG will host a virtual panel discussion on capital markets, economic performance and job creation. Speakers include JSE CEO Leila Fourie and Chris Loewald, head of economic research at the Reserve Bank and a member of the monetary policy committee.
On Tuesday, Moody’s and its affiliate GCR Ratings will host a joint press briefing covering the economic outlooks for SA and Kenya. The session will also examine resilience in SA’s banking and property sectors and assess growth prospects for digital credit providers.
The week concludes with the G20 fiinance ministers and central bank governors’ meeting in Washington (Wednesday and Thursday), co-chaired by finance minister Enoch Godongwana and Reserve Bank governor Lesetja Kganyago. The gathering will focus on global growth, financial stability and co–ordinated responses to ongoing economic risks. There will be a press conference after the meeting.
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