Eskom has implemented Stage 4 load shedding for the first time in three weeks amid some loss of generation capacity

The National Treasury is due to release its main budget data for July. Absa group and the Thomson Reuters consensus expect a main budget deficit of R123.7bn, slightly smaller than the R129.5bn deficit recorded in July last year. Our forecast is broadly in line with the provisional financing data. A print in line with our forecast would leave the 2023/34 fiscal year-to-date main budget deficit at R171.0bn, compared with the deficit of R118.0bn over the same period in 2022/23.

Absa believes that higher interest rates continued to dampen the growth of private sector credit extension in July. The SARB is due to release the private sector credit extension (PSCE) today at 8:00. PSCE growth has been trending gradually downwards since February and we believe that it continued to slow in July amid a higher interest rate environment. We forecast that PSCE growth eased just slightly to 6.2% y/y in July (Thomson Reuters consensus: 6.2%) from 6.3% in June.

Eskom escalated load shedding to Stage 4 for the first time in three weeks. After an escalation of daytime load shedding to Stage 2 (05:00 to 16:00), Eskom implemented Stage 4 during peak demand yesterday (16:00 to 05:00) for the first time since 8 August. The power utility attributed the higher stages of load shedding to the loss of additional generation units and said that it would repeat this pattern of load shedding until further notice. As of yesterday, plant breakdowns accounted for 16.2GW of unavailable generation capacity, while a further 6.0GW was offline due to planned maintenance. This left Eskom’s energy availability factor at just 52% of installed capacity for the first time since early May.