I mports would remain subdued for the foreseeable future with very little growth expected in 2019. Nedbank economist Isaac Matshego said while the economy was expected to pick up slightly over the next few months it was still at a very slow pace. “The growth forecast for 2018 is 0.6% and we do expect that to improve slightly in 2019 with the current forecast around 1.6%,” he told FTW. “That should result in a slight improvement in domestic demand and consumption but it’s not going to be much and it will also be very slow.” He said despite the slight improvement in the overall economic environment, the consumer landscape remained extremely challenging. Overall political and economic uncertainty coupled with the high unemployment rate in the country had left consumers unwilling to raise spending levels. “We do think that the slight improvement in growth will improve domestic demand and that will boost imports, but not by much. It is also highly dependent on the exchange rate and inflation.” Matshego said inflation was expected to pick up to around 6% in the second quarter of 2019 which would again see consumer demand dampened. Also, the ever-increasing fuel price and high logistics costs were hampering import growth. “As a country, we remain dependent on trucking – and considering the high fuel costs the country is facing it drives up costs significantly.” According to Matshego there is some relief for December in this regard as the price of diesel is expected to drop by at least 90 cents and petrol by R1.50 per litre in early December. Commenting on the exchange rate, Matshego said the rand would remain vulnerable in the first half of 2019 in view of the country’s pending national election. “Issues such as land appropriation without compensation remain a concern, causing a lot of uncertainty which in turn puts pressure on the rand, ultimately dampening import growth.” He said disposable consumer goods were still seeing some growth but it was the big ticket durable items that were not registering any growth with imports of many of these goods down. “It is not all negative as there will be some recovery in demand that will see a slight improvement in import growth, but it remains very subdued,” he told FTW.
