South Africa is expected to end its longest run of quarterly growth in nearly a
decade as Q2 GDP likely contracted 0.1% QoQ, versus a 0.5% expansion in Q1, the
median of a 14-economist survey showed. The decline reflects the Iran war that
began Feb. 28 — whose initial effects only partly showed in Q1 but fully hit Q2
— lifting Brent and agricultural input prices and constraining traffic through
the Strait of Hormuz, a route for about one-fifth of seaborne oil and LNG.
Retail sales rose only 0.4% while wholesale trade fell 4.2%; gross fixed capital
formation may be damped as war-driven uncertainty and higher costs weigh on
investment. Economist John Loos said sentiment surveys are weak and point to
continued investment weakness driven by uncertainty and the interest-rate
outlook rather than structural problems, a pattern that could persist.
