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VIEW: Bank Of America: Weak Growth Justifies SARB Cut In Sep

SOUTH AFRICA

Bank of America Research estimate a "15% Y/Y and 45% Q/Q annualised GDP contraction in Q2. 2020 growth is now tracking -9%. Such an outturn would still be more bearish than consensus (-8%) and the SARB (-7.3%). We remain cautious on the H2 recovery amid loadshedding (Eskom expects shortages to continue and could exceed 2019 levels), job losses, fiscal headwinds as well as political uncertainties. This should justify a final 25bp cut from the SARB on September 17. ZAR strength is supportive ahead of the October mid-term budget and US elections. We see consolidated deficits around 16% of GDP with public debt breaching 100% by 2023/24. Any progress on anti-corruption measures would be a key positive."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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