A Chief Economist at Investec, Annabel Bishop, says while South Africa may stand to gain from higher commodity prices through a trade surplus, increased oil prices pose a risk to inflation and economic growth.
This after the Gross Domestic Product (GDP) data released by Statistics South Africa showed that the country’s economy grew by 4.9% in 2021 following a 6.9 contraction in 2020.
Stats SA further notes that GDP increased by 1.2% in the fourth quarter of 2021.
Investec has downgraded its economic growth forecast for this year from 1.8% to 1.6% on the back of rising risks posed on the local economy by the Russia-Ukraine war.
“The reality of the situation is that the very high oil prices, as oil is South Africa’s main import, will counteract the positive impact from South Africa’s commodity exports. South Africa exports a lot of agricultural goods, both edible and non-edible and of course metals and minerals. So overall we think that the outcome will be positive for the current account and the trade balance and we see that reflected in the rand which has remained quite stable in the face of this huge uncertainty in the global financial markets as a consequence of the Ukraine war.”
— Stats SA (@StatsSA) March 8, 2022
GDP | Stats SA says the country’s economy grew 1.2% in the last quarter of 2021 – Nedbank’s Nicky Weimar: