Boston, MA -- (SBWIRE) -- 12/11/2014 -- Core Views:

- The South African economy will grow at a tepid rate over the medium term, with real GDP expanding by just 1.5% in 2014 and 2.1% in 2015. Our view is predicated on several factors including weak investment sentiment and the ongoing retrenchment in the gold and platinum mining sectors.

- The appointment of Lesetja Kganyago as incoming governor of South Africa's central bank means that monetary policy will continue in the same vein. Although inflation is above-target, the South African Reserve Bank will hold off from hiking rates over the coming 12 months in a bid to support ailing economic growth.

- Our core scenario is for economic reforms to move at a slow pace owing to the different political leanings in the tripartite alliance (between the ruling African National Congress (ANC), the South African Communist Party and the trade union Cosatu) which tend to result in indecision and sclerotic implementation of policy.

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Major Forecast Changes:

- We have changed our interest rate outlook and now expect rates to remain on hold over the coming 12 months, while previously we expected small rate hikes. The change in our view was precipitated by a deterioration in the outlook for economic growth, and a more benign picture for inflation.

Key Risks To Outlook:

- A sustained bout of global risk aversion with an attendant sharp outflow of portfolio funds. This would threaten South Africa's balance of payments.

- A sudden uptick in domestic political risk, such as an escalation of the industrial unrest that blighted various sectors in 2013.

- A sustained period of high oil prices would exacerbate the already-sizeable current account deficit.

Forecast Table:

The South Africa Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in South Africa and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of South Africa's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

- Forecast the pace and stability of South Africa's economic and industry growth through end-2018.

- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.

- Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.

- Contextualise South Africa's country risks against regional peers using BMI's country comparative Risk Rankings system.

- Evaluate external threats to doing business in South Africa, including currency volatility, the commodity price boom and protectionist policies.

The South Africa Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the South Africa economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for South Africa through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The South Africa Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.

- BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).

- Balance of Payments - trade and investment, current and capital account.

- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).

- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.

- Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.

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