ECONOMICS AND POLITICS 

As suggested in the previous month’s commentary, growth in manufacturing, trade, and mining managed to drive a significant rebound in local Gross Domestic Product (GDP) for the third quarter of 2020. The real GDP growth came in at 66.1% quarter on quarter (annualized). Consumer Price Index (CPI) data released for the month of November indicated a slight slowdown from 3.3% in the previous month to 3.2% year-on-year. Other data releases included a record surplus in the local current account balance of 5.9% (the largest since 1988) for the third quarter. The trade balance benefitted from strong commodity prices and there was a significant jump in exports thanks to easing lockdown restrictions. Unfortunately, it was not all good news, as brief periods of loadshedding and various lockdown restrictions were reimposed throughout
the month. On the global front, the much-anticipated additional fiscal stimulus package in the United States (US) was finally approved. The America Federal Reserve Bank (Fed) committed to continue with its bond buying program until full employment is reached and to keep inflation at 2%. In the United Kingdom (UK), after years of negotiations and political chaos, as well as many last-minute crisis discussions between the European Union (EU) and the UK, the Brexit transition deadline of 31 December has passed. Previous agreements between the EU and UK are no longer valid. While a post-Brexit trade agreement was eventually reached, it remains to be seen how effective the agreement is and whether Prime Minister Johnson has delivered on all his promises. In Asia, indicators from China continue to support a recovery, with initial estimates pointing to a 2% growth rate for 2020. According to local comments, China’s leadership plans to target an 8% real growth rate for 2021, while slowly reducing monetary and fiscal interventions used to combat the COVID-pandemic.