South Africa may drop below Egypt in GDP rankings

by Charlie Robertson, Global Chief Economist, Renaissance Capital 18 views0

South Africa may drop below Egypt in GDP rankings

Africa’s Gross Domestic Product (GDP)

In Africa – the IMF does not publish dollar GDP estimates for Egypt in case anyone realises that the currency may weaken …but we do.  And if I add in Egypt – I discover that South Africa is just $2bn larger than Egypt in 2015 (if IMF and Rencap forecasts are correct).  How the mighty have fallen.  The FT news editor on Monday called SA a colossus in Africa – but now it is on the verge of falling into third place. 

Give it two years and I’d expect SA to be ahead of Egypt though – the rand is cheap and the Egyptian Pound is expensive.  Give it five years … then Egypt President Abdel Fattah el-Sisi’s reform effort (and the larger population) may put it ahead permanently.

Note even if Nigeria devalued by 15 per cent as we expect or even a more dramatic 30 per cent (as implied by our Real Effective Exchange Rate piece) – it would be ahead of everyone else.

 

Chart1

Source: IMF, Rencap