ECONOMIC WEEK AHEAD: GDP growth for 2018 and the Nersa tariff decision make for an exciting week
Business wants Eskom tariff hike proposals rejected because it would cost jobs and reduce production
The SA economy’s full-year performance will be revealed on Tuesday when StatsSA publishes the remaining GDP data for 2018 but, as important, will be the outcome of the energy regulator’s multi-year electricity tariff decision on Thursday. The consensus expectation is that the economy posted growth of only about 1.2%-1.8% quarter-over-quarter in the fourth quarter, a considerable slowdown from the post-recession rebound of 2.2% quarter-over-quarter achieved in the third quarter. However, forecasting quarterly GDP growth is tricky since economists can capture only 40% of the required data upfront, so have to model the rest. “There is even greater forecast risk for the fourth-quarter GDP [number] given that this is when StatsSA implements substantial data revisions,” explains Citi Bank economist Gina Schoeman. She expects fourth-quarter GDP to be 1.1%. If so, GDP growth for 2018 will come in at a desultory 0.7% compared to the 1.3% achieved in 2017. Capital Economics economist John Ash...
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