Output Growth Outlook: A Synchronized Slowdown and Contraction?


Friday, August 07, 2020/ 03:00 PM / United Capital Research / Header Image Credit: Al Arabbiya


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The world is suffering from both the primary and secondary impact of COVID-19 pandemic. Africa was the last frontier to be hammered by COVID-19 and despite the late arrival of the virus and the prompt implementation of social distancing measures, the virus spread rapidly across the region, currently with about a million cases.


Notably, The World Bank has estimated that the deadly COVID-19 pandemic could cost the region between $37.0bn - $79.0 bn in terms of output losses caused by trade disruption. However, with the expansionary policies rolled out by both fiscal and monetary authorities across the region estimated at under $20.0bn, we assume that these policies can only at best minimize the depth of contraction/slowdown.


As economies re-open, we believe that the shape, duration, and size of recovery will vary from country to country, depending heavily on the improvement in the external dynamics (global supply chain, commodity prices as well as capital flows) and the length of time required to bring economic activities back to near pre-COVID-19 levels. We note that recovery will be more strenuous in countries with little to no monetary or fiscal space to provide large-size bailouts for economic recovery. The downside risk to our overall outlook remains that the decline in growth could be deeper and more widespread as outbreaks intensify and spread more widely across the region.


Top African Stories 

  • Telkom Kenya says no longer pursuing joint venture with Airtel Kenya: Telkom Kenya said on Wednesday it was no longer pursuing a proposed joint venture transaction with the Kenyan unit of India's Bharti Airtel. Read more

  • 10 countries account for 80% of Africa COVID-19 testing - Africa CDC: Ten countries account for 80% of the new coronavirus testing taking place across Africa, a regional body said on Thursday, indicating that little testing is taking place in many countries around the vast continent. Read more

  • South Africa's rand slips to 10-week low, stocks continue bull run: South Africa's rand fell to its lowest in 10 weeks on Thursday, as investors' risk appetite dwindled and the dollar found some support after data showed U.S. jobless claims fell slightly in the latest week. Read more

  • Ethiopia prepares for partial privatisation of Ethio Telecom: As Ethiopia prepares for the partial privatisation of Ethio Telecom, the state telecoms monopoly has announced a 31.4% jump in revenues for the 2019/20 year. Read more

  • Morocco Weighs $2 Billion in Bond Sales as Virus Sparks Rethink : Morocco is considering sovereign bond sales of about $2 billion in late September as the coronavirus prompts it to increase its reliance on international debt markets, according to two people familiar with the matter. Read more   


Looking Forward


Jul-2020 CPI YoY - August 8th



Jul-2020 CPI YoY - August 10th

Aug-2020 lending and deposit rate - August 13th



July-2020 Inflation Report - August 12th



Jun-2020 Overseas remittances - August 13th

Q2-2020 PPI YoY - August 13th



Jul-2020 CPI YoY - August 13th



Jul-2020 Private sector credit YoY - August 13th


South Africa

Jul-2020 Gross reserves - August 7th


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