The supplementary budget puts forward a path to restore the sustainability of the fiscus, without compromising on important social programmes. The belief that we can spend our way out of low growth is misguided, writes Finance Minister Tito Mboweni in the the linked Business Day article. "In considering our economic future beyond Covid-19 most economists agree that the best way to reduce SA's debt burden is to grow the economy. Higher, more inclusive growth will be accompanied by higher investment and job growth that will place the economy on a sustainable path."

The linked TIPS Tracker highlights important trends in the Covid-19 pandemic in South Africa, and how they affect the economy. It analyses publicly available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses. The report  raised the question of how to understand the factors driving infection rates in the light of the divergent regional trends. "The much-heralded 'peak' is, after all, only visible when the number of new cases starts to fall. In contrast to seasonal flu or diseases like measles, for which preventative measures exist, the only way to bring down the number of cases is behavioural change on a mass scale. Yet the government reimposed limited restrictions on especially risky activities only on 12 July, six weeks after the growth in new cases began to escalate."

On 14 July, the Agricultural Law Section of the International Bar Association (IBA) hosted a webinar which focused on the global impact of Covid-19 lockdowns on the international trade in agricultural goods. The vast majority of countries in Europe, Asia, North and South America as well as some of the larger African producers such as Egypt, South Africa, Nigeria and Kenya all imposed some form of lockdown to flatten the curve of Covid-19. The situation is now improving for most countries but it is remarkable to note how similar the challenges were that was faced by export-oriented countries around the globe. Agbiz head of Legal Intelligence Theo Boshoff provides feedback in the linked article.

In the second week of July 2020, the Economic Transformation Committee of the African National Congress (ANC) and Business for South Africa (B4SA), released their respective strategy documents for the post-Covid-19 inclusive economy recovery for South Africa. Both the ANC and B4SA prioritized the agriculture sector, for its transformative potential and aligned their strategies with chapter six of the National Development Plan (NDP)4, which reflects the commitment of both the government and private sector to the larger development agenda of South Africa. Agbiz chief economist Wandile Sihlobo compares the ANC and B4SA agricultural development plans in the linked article.

South Africa's food price inflation accelerated to 4.8% y/y in May 2020, from 4.6% y/y in the previous month. This uptick was mainly underpinned by relative price rises of milk, eggs and cheese; oils and fats, and fruit. Meanwhile, other products' price inflation slowed and some remained roughly unchanged. In the case of eggs, the sharp demand at the start of the lockdown period was, in part, a key driver of the uptick in prices in May and also the previous month. In terms of oil and fats, South Africa imports a notable share, therefore the weaker ZAR/USD partially supported the prices. We were surprised by a notable uptick in fruit prices as the country has large supplies this year. And we think this could be a temporary blip. Wandile Sihlobo discusses the latest data in the linked article.

This past week the United States Department of Agriculture (USDA) released an update of its World Agricultural Supply and Demand Estimates report for July 2020. Our interest in it is primarily maize, wheat, rice and soybeans, specifically the 2020/21 production season estimate. There were broadly minor adjustments in production estimates of many countries, aside from the US, whose maize and wheat production estimates were revised down, notably. In the case of wheat, the EU's 2020/21 production prospects were also revised down from June 2020. This was, in part, on the back of expected lower yields due to drier weather conditions over the past couple of weeks. Meanwhile, rice and soybean production estimates were left roughly unchanged from June. Wandile Sihlobo discusses the global grains market in the linked article.