2020 is right around the corner (we know, we can’t believe it either). With that being said, it’s always good to have a jump start on the new financial year and prepare for the new financial year to keep your business succeeding.
Let’s dive into what happened this year.
- The International Monetary Fund is the latest key institution to slash its growth forecast for Africa’s most-industrialised economy, which may have fallen into its second recession. It was expected that the economy would expand by 0.7% in 2019, half of what was estimated in January, and similar to forecasts by the South African Reserve Bank and Bloomberg Economics. The same can be expected for 2020.
- The economy shrank the most in a decade in the first quarter of this year as the nation suffered the worst power outages since 2008.
- Looking at prospects for 2020, GDP growth is to be marginally negative at -0.1% in 2019, rising to 1.3% in 2020. As far as other GDP components go, government consumption expenditure growth should decelerate to -0.8% compared with 1.9% recorded in 2018. Unfortunately, negative fixed capital formation growth is likely to accelerate.
- South Africa recorded a trade surplus of ZAR 6.84 billion in August of 2019 compared to an upwardly revised ZAR 3.72 billion deficit in the prior month, easily beating market expectations of a ZAR 2 billion surplus. It was the largest trade surplus since last December, as exports surged 8.4 percent from a month earlier to an all-time high while imports fell 1%. Which could mean a lot if you are in exports/imports as well as for consumers. For all we know; we may have some price decreases in 2020.
Exports soared 8.4 percent month-over-month to a record high of ZAR 122.02 billion in August. Driven by:
- Shipments of mineral products (18%)
- Precious & metal stones (10%)
- Machinery & electronics (11%)
- Vegetable products (6%)
- Vehicles & transport equipment (4%).
Imports declined 1.0 percent from a month earlier to ZAR 115.18 billion, dragged down by:
- Mineral products (-12%)
- Vehicles & transport equipment (-11%)
- Original equipment components (-6%).
In contrast, increases were seen in purchases of chemicals (14%) and vegetable products (31%).
Considering the first eight months of the year, the country’s trade deficit shifted to a ZAR 0.85 billion deficit compared to a ZAR 4.67 billion surplus, as imports grew at a faster 7.6% to ZAR 848.78 billion while exports advanced 6.9% to ZAR 847.93 billion.
Excluding trade with neighboring Botswana, Lesotho, Namibia, and Swaziland, the country’s trade shortfall narrowed to USD 4.14 billion in August 2019 from an upwardly revised ZAR 12.87 billion in a month earlier.
To view a complete overview of this year and the expected growths or declines for 2020, you can view this here: https://tradingeconomics.com/south-africa/forecast
Even though 2019 was in some ways a good and bad year, it seems 2020 might be quite similar. With rises and falls in a lot of different sectors. Make sure you plan appropriately to keep yourself and your business in the know and on top of things. That way, you will take 2020 head-on with a plan and know what you can do to keep your business thriving.
We have multiple blogs you can read to help you manage your finances; giving you the head start you need: https://easybiztech.co.za/blog/page/2/