Economic week ahead: Updated global growth forecast

A rates decision in Nigeria and an inflation release in South Africa are the big economic events in Africa this week. Further afield, the International Monetary Fund (IMF) will update its global economic outlook on Thursday.

Earlier this month, IMF chief Christine Lagarde hinted that the institution’s current 3.6% growth forecast – released in April – is probably too rosy.

Policymakers at the Central Bank of Nigeria will announce their latest rates decisions on Tuesday. Officials were unanimous in their decision to leave the bank’s monetary policy rate unchanged at 12% in May and are widely expected to do the same at this week’s meeting, the first to be chaired by new president Godwin Emefiele.

Inflation risks in Nigeria are rising, but remain within the 6.0% to 9.0% target range established by Emefiele’s predecessor, Lamido Sanusi. Combined with the recent strength of the naira, healthy reserve levels and oil revenue, policymakers are unlikely to feel much pressure to depart from the status quo in the near term.

Midweek, attention will turn from the continent’s largest economy to South Africa for Statistics South Africa’s release of last month’s consumer price index (CPI). Inflation exceeded the South African Reserve Bank’s 3% to 6% target in April and May and is likely to have remained out of bounds in June. The central bank does not see inflation falling within target until the second quarter of next year as a weak rand, labour costs and food prices continue to exert upward pressures on prices.

Elsewhere on the continent, Angola, Morocco and Zambia will release June inflation data. Kenya will report June money supply. Tanzania and Ghana will report May money supply. And Ghana will release last month’s producer price index (PPI) readings.

United States
Data covering consumer inflation, existing and new home sales and durable goods orders are the big items on an otherwise extremely light US data docket this week.  

Consensus is that Tuesday’s consumer price index (CPI) data will show that prices climbed 0.03% from May to June, down from a 0.04% rise over the previous month.

Existing homes sales figures from the National Association of Realtors – also due for release on Tuesday – are likely to show that the seasonally adjusted annualised rate of existing home sales rose to 4.99-million units in June from 4.89-million in May. Existing home sales account for the largest share of overall sales and are viewed by many analysts as a key indicator of housing market trends.

On Thursday, new home sales data may show that purchases slowed to a seasonally adjusted annualised rate of 475 000 units in June from 504 000 in May. May’s level – which reflected an 18.6% monthly surge in purchases – far exceeded market expectations.

Closing out the week on Friday, durable goods orders data will probably show that orders climbed 0.5% last month after falling 1% in May, a much weaker performance than economists anticipated.  

The unstable situation in Ukraine and rising tensions between Russia and the rest of the world over the downing of Malaysia Airlines Flight 17 will remain in the spotlight this week. Foreign ministers from the European Union will meet in Brussels on Tuesday to consider additional sanctions against Russia as President Vladimir Putin remains defiant in the face of mounting global opposition.

Beyond this evolving situation, economists and investors will be on the lookout for euro zone consumer confidence data and minutes from the Bank of England’s latest policy meeting on Wednesday.  

On Thursday, attention will turn to flash July purchasing managers’ index (PMI) results for the euro zone and its two largest component economies, Germany and France. The euro zone’s indices are expected to rise slightly further into expansion territory, as is Germany’s composite index. France’s manufacturing and services indices, on the other hand, are both expected to continue to signal contraction.

Indonesia’s Electoral Commission will release the results of the country’s recent presidential election on Tuesday. Reformist candidate Joko Widodo is widely expected to win, but former military strongman Prabowo Subianto has indicated that he will not accept the results. Subianto and his supporters allege widespread fraud in a number of areas and are demanding re-votes.   

On Thursday, attention will turn to flash estimates of HSBC’s China manufacturing purchasing managers’ index (PMI) and Japan’s latest trade figures.

Analysts expect trade data from Japan’s Ministry of Finance to show that exports rose 1.1% from a year earlier, that imports rose 9% and that the country’s trade deficit narrowed to ¥688-billion in June from ¥911-billion in May.  

Closing out the week on Friday, Japan’s Ministry of Internal Affairs and Communications will release June’s national core consumer price index (CPI), an inflation measure which excludes perishables but includes energy. Economists surveyed by Market News International expect the data to show a 3.3% rise from a year earlier, down from 3.4% in May.

Excluding the effect of April’s consumption tax rise, core CPI probably rose 1.3% from a year earlier. If consensus proves accurate, June would mark the 13th consecutive year on year rise for inflation in Japan, welcome news to a country that has long battled deflation.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories


Subscribers only

Ithala fails to act against board chairperson over PPE scandal

Morar asked to settle with the state and pay back the profit he made on an irregular tender

Vodacom swindled out of more than R24m worth of iPhones

A former employee allegedly ran an intricate scam to steal 8700 phones from the cellular giant

More top stories

‘It is so hard being a black and broke’: How...

Thousands of students are anxiously awaiting for the National Student Financial Aid Scheme to respond to their funding applications as registration at institutions draws to a close

Former GP health MEC Masuku calls disciplinary ‘unfair’

The ANC’s disciplinary hearing against Dr Bandile Masuku has started; however, the matter against Khusela Diko has been shelved after her husband’s death

‘Extreme’ tactics and lockdown buy rhino more time

The Rockwood Conservation reserve boasts zero poaching incidents in six years and its breeding project is successful, but costly

What is EFF’s party funding quest?

Its court application to force disclosure of donations to Cyril Ramaphosa may mask a bid to portray him as a capitalist puppet

press releases

Loading latest Press Releases…