Economy / General

Coface Country and Sector Risk Barometer - Q2 2023 Lost illusions and great expectations

PPS Investments: CPI for May 2023

Consumer price inflation increased by 6.3% year-on-year in May 2023, which was a decline from the 6.8% year-on-year print in April. This marks the second successive year-on-year decline and the largest decline since May 2020 when the COVID-19 lockdown was in effect. Inflation now averages 6.8% for the year to date and remains above the South Bank Reserve Bank expectation of where it should average for the full calendar year. Month-on-month inflation increased by 0.2%, compared to the 0.4% increase in April.

1Q23 GDP: Economy escapes a recession, but still stuck in the lowest gear

Following an upwardly revised GDP contraction of 1.1% q/q (previously 1.3% q/q contraction) in 4Q22, the economy defied our expectation of a mild technical recession and expanded by 0.4% q/q in 1Q23 (Figure 1).

Faltering economy puts your business at risk

Over the last few weeks, this writer has seen more and more headlines of the type that should send shivers up and down the spines of South Africa’s financial and risk advice professionals. For two examples, consider the Daily Maverick’s ‘Capitec CEO warns consumers to live within their means as credit impairments climb by 80%’; and Fin24.com’s ‘Home loan clients taking strain as average instalment rockets by 38% in a year, says Absa’. Are these headlines symbolic of a ‘countdown to Zimbabwe’ moment?