South Africa Leading Index Falls For Second Month

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South Africa’s leading index decreased in April amid the coronavirus pandemic, survey data from the South African Reserve Bank showed on Tuesday.

The leading index fell 5.1 percent to 97.2 in April from 102.4 in March.

The initially reported increase in the leading indicator for March was revised to a decrease of 0.9 percent, the bank said.

Seven of the nine components decreased in April, while two increased from the previous month, the central bank said.

The largest negative contributions to the movement in the composite leading business cycle indicator came from the marked accelerations in the twelve-month rate of decrease in the number of new passenger vehicles sold and in job advertisement space, the bank said.

The biggest positive contributions came from a widening in the interest rate spread and an acceleration in the six-month smoothed growth in the real M1 money supply.

“The exogenous nature of the COVID-19 pandemic implies that it was not possible for the composite leading business cycle indicator to have predicted its impact on economic activity in advance,” the bank added.

The downward trend in the leading indicator that prevailed since March 2018 suggested a slowdown in real economic growth before the beginning of the pandemic, in the form of a technical recession that began in the third quarter of 2019, the bank said.

The coincident index fell to 99.7 in March from 102.3 in February.

The lagging index fell to 93.0 in March from 94.4 in the prior month.

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