Business Day Spotlight
PODCAST | Economic news of the week: PMI figures indicate the worst is over
PwC economist Christie Viljoen talks about SA’s economy and the outlook for Africa
In this edition of the Business Day Spotlight, we’re looking at the state of Africa’s economy in light of recent data.
Our host Mudiwa Gavaza is joined by Dr Christie Viljoen, an economist at PWC to unpack the data and the week in economics.
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The discussion begins with Viljoen explaining the findings of the latest purchasing managers’ index (PMI) results for a number of African countries including SA.
PMI reports are based on the results of questionnaires sent to purchasing managers at private sector companies. The PMIs are some of the earliest data releases for a given month and are usually released within the first week of a new month.
Viljoen says most of the continent’s PMI readings improved in May, with the exception of SA and Zambia, and all eight of the country indices showed month-on-month improvements in June.
At present the expectation is that the global economy is going to contract by about 5%, with Africa’s economic decline set to be less drastic at -3.5%.
Viljoen explains that this is because the rate of infection has been less on the continent, owing to lower global integration, unlike SA which has seen a swift rise in Covid-19 infections in recent weeks and is heavily susceptible to headwinds in overseas markets.
This may be a good time for SA companies to explore opportunities in Africa, Viljoen says, explaining that intra-Africa trade is very low, estimated at 15% of total trade on the continent. He says one of the saddest effects of Covid-19 was the delaying of the Africa Free Trade Agreement meant to have come into effect in July. More trade among African countries would be good for regional integration as seen in Europe or North America but it could also help to reduce the reliance on international markets.
The discussion also explores other indicators such as consumer confidence in SA, the Reserve Bank’s bond purchasing programme, an outlook for Africa and what Viljoen is actually positive about when it comes to the local economy.
For more episodes, click here.
Engage on Twitter at #BDSpotlight or via e-mail at MullerP@arena.africa
• Business Day Spotlight is a MultimediaLIVE production.
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