Economic week ahead: SA, Nigeria consumer inflation data

Inflation releases in Nigeria and South Africa – Africa’s two largest economies – are the big items on the continent’s economic calendar this week. Elsewhere in the world, the Federal Reserve’s annual Jackson Hole gathering, purchasing managers’ index (PMI) releases in Europe and China and the UK’s latest inflation data will feature prominently in the headlines over the coming days. Here is your guide. 

Statistics South Africa (Stats SA) will report tourist accommodation, transport and food and beverage sales figures for June on Monday, but this week’s big release will not come until Wednesday when Stats SA will report consumer inflation data. 

South Africa’s consumer price index (CPI) rose 6.6% in June from a year earlier, well outside the central bank’s 3.0 to 6.0% target band. Consensus is that the index eased somewhat, to 6.3% year on year growth, last month.

In a speech posted to the South African Reserve Bank’s (SARB’s) website on August 13, SARB Deputy Governor Daniel Mminele said that South Africa’s CPI will probably average 6.3% growth this year. 

In a Reuters’ poll earlier this month, the majority of economists surveyed forecast a further 25-basis point rise to South Africa’s benchmark repo rate by year’s end. Policymakers have already raised rates from 5% to 5.75% since January. 

Elsewhere on the continent, inflation updates are also expected from Nigeria – Africa’s largest economy – on Monday and from Botswana and Morocco later in the week. Ghana will report producer price inflation on Wednesday.

Beyond these data releases, markets will be on the lookout for the Bank of Namibia’s latest rates decisions on Tuesday and three sovereign ratings updates on Friday. Moody’s will release updated ratings for Botswana and Mozambique. Standard & Poor’s will do the same for Congo. 

United States
The National Association of Homebuilders’s August housing market index is first up on America’s data docket this week. Analysts expect the index to remain flat after jumping to its highest level of the year last month.

More housing data will follow on Tuesday along with the government’s latest inflation figures. 

Markets were extremely disappointed by June’s housing starts, which fell 9.3% from May. Consensus is that new construction activity probably rebounded last month, possibly rising to a seasonally adjusted annualised rate of 963 000 units in July from 893 000 in June, a 7.8% rise.  

America’s headline CPI figure posted a 0.3% rise in June, down one-tenth from May’s 0.4% increase. Analysts expect further slowing – to a 0.1% monthly uptick – in July. 

On Wednesday, the Federal Reserve’s release of minutes from last month’s Federal Open Market Committee policy-setting meeting will take centre stage. With labour market conditions improving faster than expected, economists and investors will scrutinise the notes for clues as to when officials might raise rates. 

On Thursday, attention will shift back to the housing market as the National Association of Realtors releases July’s existing home sales tallies. The pace of existing home sales rose 2.6% to a seasonally adjusted annualized rate of 5.04-million homes in June, but probably pulled back slightly last month. 

As the week draws to a close, markets will watch for headline news from the Fed’s annual Jackson Hole, Wyoming conference. This year’s theme is “Re-Evaluating Labor Market Dynamics”. Fed Chair Janet Yellen and European Central Bank chief Mario Draghi are among the speakers. 

German chancellor Angela Merkel will meet with Latvian Prime Minister Laimdota Straujuma in Riga on Monday to discuss the situation in Ukraine. A press conference is scheduled for 4.30pm. 

On Tuesday, the United Kingdom will release last month’s CPI readings. Markets expect inflation to have remained steady at 1.9% growth from a year earlier. Non-core inflation probably declined slightly, but core inflation likely edged up to 2.2% year on year growth from 2.0% in June, largely due to base effects. 

On Wednesday, the Bank of England will release the minutes from its latest policy meeting, when policymakers left the benchmark interest rate on hold a record low 0.5%. With employment, confidence and growth prospects all on the rise in Britain, speculation is mounting that a rates rise may come sooner than previously expected. As always, analysts will scrutinise the minutes for timing clues. 

On Thursday, attention will shift back to continental Europe for a series of PMI releases. The ongoing situation in Ukraine, and the mutual economic sanctions between Europe and Russia it has triggered, is likely to drive most of the gauges lower. 

Analysts expect deterioration in the eurozone’s manufacturing, services and composite PMIs. Germany’s manufacturing and services PMIs probably also slid, as did France’s services PMI. France’s manufacturing PMI probably held steady, but below the 50-mark separating expansion from contraction.

China will release housing price data on Monday. Weakness in the country’s property market has been a significant drag on the world’s number two economy. More disappointing news is expected on Monday, which may lead to calls for further stimulus measures from Beijing. 

Later in the week, HSBC will release its preliminary China manufacturing PMI. Thursday’s release is likely to show deterioration to a reading of 51.5 from 51.7 previously. Coming on the heels on weaker than expected industrial production, retail sales and fixed investment data, a weak PMI report would be viewed by many as a confirmation that China’s economy has slowed in the third quarter following strong performance in the second. 

Elsewhere in the region, Japan will release July’s trade data on Wednesday. Economists surveyed by Market News International expect the data to show a trade deficit of ¥702.5-billion, the nation’s 25th consecutive monthly gap. 

Exports probably rose 4.0% from a year earlier, led by export of cars and industrial equipment. Imports probably fell 2.0% over the same period, their first fall in two months after an 8.4% increase in June.

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. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


Meet the doctor leading Africa’s fight to contain the coronavirus...

Dr Matshidiso Moeti’s father helped to eliminate smallpox. Now she’s leading Africa’s efforts against the coronavirus

Stella set to retain her perks

Communication minister will keep Cabinet perks during her two months of special leave

Covid-19 grounds Nigeria’s medical tourists

The country’s elites, including the president, travelled abroad for treatment but now they must use the country’s neglected health system

Press Releases

Rahima Moosa Hospital nursing college introduces no-touch facial recognition access system

The new system allows the hospital to enrol people’s faces immediately, using artificial intelligence, and integrates easily with existing access control infrastructure, including card readers and biometrics

Everyone’s talking about it. Even Kentucky

Earlier this year South African fried chicken fast-food chain, Chicken Licken®, launched a campaign for their wallet-friendly EasyBucks® meals, based on the idea of ‘Everyone’s talking about it.’

New energy mix on the cards

REI4P already has and will continue to yield thousands of employment opportunities

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world