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Short report that reviews important global and domestic financial market and economic data developments of the past week
Research Notes are more in-depth analyses undertaken by BER economists and consultants.
The Impumelelo Economic Growth Lab is a unit at the BER, focussing on generating policy-relevant work and capacity building to achieve economic success in South Africa. Our work is open to all registered users of our website.
The SA economy expanded by just 0.1% q-o-q in 2025Q1, a slowdown from the (downwardly revised) 0.4% expansion recorded in 2024Q4. The downward revision to Q4 means that the economy performed even weaker than initially estimated in 2024.
Read MoreThe Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) decided to cut its repo rate by 25bps to 7.25% (prime to 10.75%). We expected a split decision, so the dovish tilt with all six members voting for a cut (and one even preferring a 50bps cut) was surprising.
Read MoreBudget 3.0 had the difficult task of balancing the books without the proposed VAT hike plus a deterioration in the economic backdrop. As such, it provides a sobering reality check on SA’s macro and fiscal position.
Read MoreA major theme that emerged from the annual BER conference held in Johannesburg earlier this week is that South Africa’s growth prospects are faltering as the economy is buffeted by huge uncertainty caused by both the Trump administration’s tariff tantrum and rising concern about local political stability.
Read MoreThe withdrawal of the VAT increase from the 2025 Budget means there will be a R75bn revenue shortfall over the medium term. The big question now is: where to cut expenditure? The BER believes that one of the best places to look for savings is among the extra-budgetary funds and public entities that are not directly controlled by the National Treasury or subject to statutory appropriation by parliament. Some of the largest spending increases are hidden in this less examined part of the fiscal framework.
Read MoreWith Trump's reciprocal tariffs kicking in this morning (SA time), financial markets remain volatile and the US-China tit-for-tat trade war is escalating at a rapid pace.
Budget 2.0 does not appear to be going through Parliament particularly easily, raising the possibility of Budget 3.0. Messy parliamentary budget processes are not particularly unique from an international perspective, but they are new territory for South Africa. In this comment, we update our Budget 2.0 preview and conclude that, without a deal (which remains possible), Budget 3.0 is increasingly likely.
Read MoreIn line with our expectations heading into the meeting, the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) opted to keep the interest rate unchanged. The decision was likely a close call, reflected in split votes by MPC members. The repo rate will remain unchanged at 7.5% (prime at 11%).
Read More“Must be an interesting time to be an economist, hey?” I can’t recall how often someone has said that to me since the middle of last year, and particularly since the beginning of this one. And they are not wrong – but it is a real challenge to distinguish legitimate signals from noise during these ‘interesting times’.
Read MoreAfter originally being scheduled for 19 February and then postponed at the last moment, the National Budget for 2025 was tabled by the National Treasury (NT) on 12 March. This is not to say it will be a done deal from here, the DA has already indicated that it will not support the Budget in its current form. The next important date is 2 April, when we will have a clear sense of Parliamentary support.
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