Economic week ahead: SA’s latest growth figures

South Africa’s second-quarter growth figures are the highlight of this week’s domestic economic calendar. Economists widely expect another disappointing report. 

Overseas, the US’s latest growth figures are likely to show that the world’s largest economy performed well in the three months to June. Europe’s August inflation update is likely to stoke further concern over the continent’s health. And China’s big bank earnings will be closely scrutinised for signs of trouble. Here is your guide.  

South Africa – Africa’s number two economy – will release second-quarter growth figures on Tuesday. Most economists expect gross domestic product (GDP) to have remained essentially flat in the April to June period, possibly growing around 0.8%, quarter on quarter. 

South Africa’s economy shrank 0.6% in first three months of the year and strikes in the platinum and steel sectors likely keep growth subdued through the second and third quarters of 2014. Officials at the World Bank, International Monetary Fund and South African Reserve Bank all expect growth of less than 2% for the year as a whole, well below the pace of expansion necessary to make a dent in the country’s high jobless rate. Elsewhere on the continent this week, Nigeria – Africa’s largest economy – will release July’s private sector credit and money supply growth figures. 

Zambia, Uganda and Kenya will report last month’s consumer price index (CPI) readings and Angola will announce its latest rates decisions. Angola’s latest inflation figures showed that consumer inflation increased slightly in July, ending a five-month downward trend. Despite this, with oil production disappointing in the first half of 2014, the Banco Nacional de Angola is likely to persist in the rate-loosening cycle it began in 2011 in a bid to further stimulate growth in the recently sizzling economy. 

United States
Last month’s new homes sales tallies will kick-off America’s data week on Monday. Economists expect the pace of sales to have risen to a seasonally adjusted annualised rate of 430 000 units in July from 406 000 in June. More housing data, along with durable goods and consumer confidence reports, will follow on Tuesday. The S&P/Case-Shiller price index is likely to show that housing prices in 20-cities rose at a slower pace in the 12-months to June as demand cooled. 

Durable goods orders probably increased 5.1% overall from June to July, but orders for business equipment may have fallen. The Conference Board’s consumer confidence index probably pulled back slightly in August after rising to its highest level of the recovery last month. 

Next up, on Thursday, the US commerce department’s second estimate of GDP will probably show that the world’s largest economy expanded by a healthy 4% in the second quarter. Growth was most likely led by gains in consumer spending and business investment. 

Finally, on Friday, the government’s latest personal income and outlay (spending) report may show that income growth eased to 0.3% in July from 0.4% in June and May. Consumption growth probably slowed to 0.2% from 0.4% over the same period.  

Europe’s economic week will begin on Monday with Germany’s closely followed Ifo Institute business survey results. Virtually everyone is expecting bad news, with some economists forecasting that the index could fall to its lowest level since May of last year.  

Later on Monday, Scottish First Minister Alex Salmond and former chancellor of the Exchequer for the United Kingdom Alistair Darling – leaders of the “yes” and “no” campaigns for Scottish independence, respectively – will hold their second televised debate in the run-up to September’s vote on the matter.

Current polls show most favour to Darling’s position. On Tuesday, Russian President Vladimir Putin and his counterparts from Belarus and Kazakhstan – the three members of the nascent Eurasian Economic Union – will begin trade talks with Ukrainian President Petro Poroshenko and representatives of the European Union in Minsk.  

Speaking to ARD television on Sunday, German Chancellor Angela Merkel warned that the first face-to-face meeting between Putin and Porshenko since the latter took office, “certainly won’t result in a breakthrough”. Nevertheless, the talks will be closely watched for any signs of progress on ending the on-going fighting in eastern Ukraine.  

On Friday, attention will shift to the eurozone’s latest inflation data. Economists expect inflation to have fallen further – likely to 0.3% growth from a year earlier in August from 0.4% reported in July – putting additional pressure on the European Central Bank to do something to stimulate Europe’s moribund economy.  

Agricultural Bank of China – China’s third largest lender – will report half year results on Tuesday. Earnings from the country’s largest lender – Industrial and Commercial Bank of China – will follow on Thursday. Both releases will be scrutinised for any rise in non-performing loans.  

On Friday, attention will shift to Japan’s monthly data dump. Officials in Tokyo will release consumer inflation, household spending, retail sales, industrial production and housing starts data for July. Economists surveyed by Market News International expect July’s national core consumer price index (CPI) to have climbed 3.3% from year earlier, its 14th consecutive year on year rise. 

Excluding the effect of April’s consumption tax hike, the rate of growth is estimated at 1.3%. Household spending likely fell 3% from a year earlier in July, marking a fourth consecutive month of declining spending. Retail sales will likely show a 0.1% year-on-year drop. The pace of decline in both measures, however, shows signs of easing as the effects of the April tax hike dissipate. Industrial production probably rose 1% from June to July. If confirmed, this would mark the first increase in output in two months. 

July housing starts probably fell 10.2%, year-on-year, to a seasonally adjusted annualised rate of 878 000 units from 883 000 in June.

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

Shake up institutions controlling the economy to dislodge inequality

The state uses policies and regulations to drive socioeconomic change, but market bias dominates

AU integration hinges on ease of economic activity

A complex array of regional structures to unite Africa's 54 member countries has created confusion when it comes to economic integration.

Economic week ahead: Syria debate, China data to dominate

Labour strikes, the US's possible intervention in Syria and data from South Africa, China and the UK will determine this week's economic mood.

Economic week ahead: Inflation on the rise

SA's latest inflation figures, manufacturing updates from China and housing data from the US are some of this week's big items on the data diary.

Economic week ahead: Consumers take centre stage

All eyes are on consumers as the markets wait for updates on the eurozone recession, US consumer sentiment and SA retail sales, writes Matt Quigley.

Economic week ahead: Looking for clarity

This week will bring a possible clarification of the US Federal Reserve Bank’s policy intentions, as well as key economic data from China.

Vaccine trial results due in December

If successful, it will then have to be manufactured and distributed

White men still rule and earn more

Women and black people occupy only a few seats at the JSE table, the latest PwC report has found

The PPE scandal that the Treasury hasn’t touched

Many government officials have been talking tough about dealing with rampant corruption in PPE procurement but the majority won't even release names of who has benefited from the R10-billion spend

ANC still at odds over how to tackle leaders facing...

The ANC’s top six has been mandated to work closely with its integrity committee to tackle claims of corruption against senior party members

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday