IBL Financial Overview
Macroeconomic scenarios - 31 March 2021
Key judgements at 31 March 2021
•
Following the onset of the COVID-19 pandemic, a management
overlay and updated macro-economic scenarios were considered
the most appropriate way to capture the worsened economic
environment, given the significant levels of uncertainty and lack of
supportable economic information to produce robust forecasts at
the time.
While there has been some improvement in the economic
environment since the easing of the lockdown restrictions,
uncertainty still remains. For this reason, management have
decided to prudently retain R290 million of overlays.
This will be reassessed in time as new economic information is
released, the consequence of the recent resurgence of infection
rates in other countries materialise and the possibility that South
Africa may experience a similar resurgence.
R'bn
4 000
3.500
3.000
2 500
Base case
South African GDP forecast
2020
2021
2022
2023
2024
2025
Extreme up case
Lite down case
Up case
Severe down case
Base case
Average 2021-2026
Macro drivers (%)
Extreme
2022
2023
2024
2025
2026
Financial year ending
Up case
up case
Base
case
Lite down
case
Severe
down
case
GDP growth
4.5
1.1
2.4
2.4
2.9
5.0
4.0
2.4
1.5
(0.7)
Repo rate
3.6
South Africa
45
4.5
5.0
555
5.1
5.4
3.5
3.8
4.7
5.0
5.5
55
Bond yield
10.3
10.3
10.3
10.7
10.7
9.2
9.5
10.4
11.1
11.9
Residential property price growth
4.6
5.1
5.3
55
5.5
5.9
6.9
62
6.2
5.2
4.1
2.7
Commercial property price growth
(1.4)
0.5
0.9
1.3
23
1.7
3.2
17
1.7
0.2
(1.3)
(2.9)
Scenario weightings
48
1
2
48
44
5
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