Times Of Swaziland: ESWATINI ECONOMY CONTINUES TO EXPAND

ESWATINI ECONOMY CONTINUES TO EXPAND
================================================================================
Nhlanganiso Mkhonta on 03/12/2024 14:25:00


MBABANE - The latest quarterly bulletin for the 3rd quarter suggests that the
Eswatini economy continues to expand on a quarter-on-quarter and annual basis.
According to the quarterly bulletin provided by the Ministry of Economic
Planning and Development, in the review period, 10 of the 16 indicators recorded
a positive performance bolstered by improved demand for production inputs
coupled with easing lending conditions to support economic activity.
In view of the positive developments above, the Eswatini Composite Indicator of
Economic Activity (ES-CIEA) signalled that economic activity continued on an
expansionary path, increasing by 1.9 per cent in 2023 Q3 on a quarter to quarter
basis. In the quarter under review, the decrease in prices for food and
non-alcoholic beverages was primarily attributed to developments in meat, which
slowed by 0.5 percentage points. Within this category prices for beef and veal
as well as poultry, it decelerated by 1.3 percentage points and 0.6 percentage
points, respectively.
Similarly, prices of milk, cheese and eggs declined by 1.0 percentage point due
to baseline effects as the products were added to the value added tax (VAT)
basket in the same period of the previous year. Sugar prices experienced
significant disinflation of 8.5 percentage points, reflecting easing
inflationary pressures due to improved supply in the domestic market. Transport
prices also eased during 2024 Q3, with the prices for eight fuels and lubricants
for personal transport equipment receding by 2.7 percentage points to average
1.3 per cent.
This decline was driven by a drop in global brent crude oil prices due to
reduced demand coupled with reduced supply disruptions, which resulted in the
fuel price reduction of E1.00 in the country. In 2024 Q3, prices for goods
further moderated by 0.3 percentage points on account of a decrease in prices
for non-durable and semi-durable goods, which were lower by 0.4 percentage
points and 0.2 percentage points, respectively.
On the contrary, there were marginal increases in the prices of durable goods.
Inflation for services also reflected a decline of 0.03 percentage points, owing
to miscellaneous goods and services. However, there were observed increases in
prices for outpatient services and accommodation services category in the
quarter.Inflationary pressures remained low in the Common Monetary Area (CMA),
with all the average headline inflation rates falling within the 3-6 per cent
target band. In the quarter under review, Lesotho had the highest, at 6.0 per
cent, followed by South Africa and Namibia at 4.2 and 4.1 per cent respectively.
Inflation
This was mainly due to a fall in the inflation rates for housing and utilities
as well as transport, which could be reflective of moderating global fuel prices
in the period under review. The September inflation forecast by the Central Bank
of Eswatini reflected that headline inflation is anticipated to average 4.2 per
cent in 2024. This was a 0.2 percentage point downward revision from the earlier
projection of 4.4 per cent produced in July 2024.
The downward revision was mainly on account of sustained reduction in the prices
of food coupled with a moderation in global Brent crude oil prices, which weigh
heavily on domestic inflation. Further downside pressures to the short-term
inflation outlook are expected to come mainly from the lower South African.