Outlook for 2011-15

• The president, Jacob Zuma, will try to strengthen the ruling party, the African National Congress (ANC), and deliver socio-economic development, but popular impatience and political in-fighting will make this a formidable challenge.
• No major economic policy shifts are envisaged. Boosting economic growth, jobs and investment will remain the government's primary focus. There is a risk of rising populism and state intervention if unemployment worsens.
• Real GDP growth will quicken from 2.8% in 2010 to 3.7% in 2011 and 4.6% in 2012, helped by stronger external demand and looser fiscal policy. Growth will ebb in 2013-15 because of persistent structural constraints
• Inflation will rise in 2011-12, spurred by rising electricity prices and wage growth. Inflation is forecast to moderate in 2013-15, helped by more stable global commodity prices.
• The rand remained strong in 2010, buoyed by capital inflows, before gradual depreciation in 2011-15, driven by the need for external financing. The rand is expected to slide from R7.3:US$1 in 2010 to R9.5:US$1 in 2015.
• The current-account deficit is forecast to rise from 3.9% of GDP in 2010 to 5.6% of GDP in 2011 and to 6.2% of GDP in 2012 as the recovery sucks in imports, before receding in 2013-15 as earnings growth quickens

Monthly review

• South Africa started a new two-year stint on the UN Security Council in January, and has been invited to join the BRIC grouping, highlighting the country's standing as a key leader in Sub-Saharan Africa.
• Draft labour law amendments to clamp down on labour brokers have angered both trade unions (for not being strict enough) and agencies (for being too harsh).
• A long-delayed new company law and a consumer protection law are now scheduled to come into force in April, but further delays are possible.
• South Africa's matric exam results improved unexpectedly for 2010, despite the disruption caused by teachers' strikes, but key skills remain in short supply.
• Inflation edged up to 3.6% year on year in November because of higher fuel and power prices, but the strong rand is helping to constrain the pressure.
• The current-account deficit widened to 3.7% of GDP in the third quarter owing to a larger invisible shortfall. However, the gap was comfortably financed by strong capital inflows.