Has South Africa experienced negative growth for a third quarter in a row in Q3? The answer will come on 4 December. Obviously, this is a risk since the Manufacturing PMI is still significantly below 50 (42.4 in October). Mining production posted another decrease in Q3 (by about -4% y/y). The palladium output was among the deteriorations, a disappointment as the demand for that commodity increased particularly in China as a result of the effort to curb emissions. The evidence of new power shortages was another bottleneck for the South African economy, showing that there has been no progress on SOE reform. Moreover, the World Bank’s latest Doing Business survey suggests that some African countries with far lower income levels made good progress, with Kenya ranking 60th and Morocco 61st out of 190 economies. South Africa is still 82nd, with one of the worst assessments regarding trading across borders (rank 143). Overall, there is a clear downside risk to our growth forecasts (+0.7% in 2018 and +1.3% in 2019).
