South Africa's pace of economic growth remains slow. External demand is weak, with low commodity prices, and the country faces domestic constraints including an inadequate electricity supply and overall weak business confidence inhibiting substantial private sector investment. Nevertheless, the National Treasury is broadly maintaining its prudent fiscal consolidation through hard expenditure ceilings. We forecast fiscal deficits to gradually reduce, with net debt stabilizing at around 45% of GDP over 2015-2018. We estimate that the current account deficit will have been smaller in 2015 than in 2014 owing to lower oil prices, weak domestic demand, and import compression from the weaker rand, while external portfolio inflows have remained fairly stable. We expect external deficits will moderately increase in the next few
