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Stats SA’s mining production numbers for May, due out on Tuesday, will be the main focal point in an otherwise data-thin week, providing another crucial indicator of how geopolitical events are affecting the local economy.Output from the sector climbed 8.2% year on year in April after a 2.5% increase in March, mainly due to a weak base of comparison. Another expansion in May would mark the sixth consecutive month of growth in activity, largely driven by platinum group metals.The data will provide an indication of whether the sector remained resilient in the face of heightened global uncertainty and elevated commodity price volatility.“Though mining has benefitted from firm precious metal prices, the release will also be watched for signs that operational constraints and softer external demand continue to weigh on output,” Bureau for Economic Research economist Tracey-Lee Solomon said.While there will be no other noteworthy releases of local economic data this week, eyes will be fixed on the Middle East, with energy and other markets affected by the supply disruptions in the Strait of Hormuz likely to remain volatile. This has implications for domestic fuel prices in August and the South African Reserve Bank’s interest rate decision on July 23.Read: US-Iran war has added strain to financial system, Prudential Authority saysThe Bank hiked its key policy rate by 25 basis points to 7% in May, citing a deteriorated inflation outlook due to high oil prices due to the conflict that broke out in late February.South Africa’s 13th annual manufacturing indaba will take place on Tuesday and Wednesday in Johannesburg, bringing together government leaders, manufacturers, investors, policymakers and industry experts from across Africa to explore the future of factory production, industrialisation, investment and regional value chains.Deputy president Paul Mashatile will deliver the keynote address.The sector has been on the ropes in recent months, a situation worsened by the Iran war driving up input costs. Output slumped 4.3% in May, its biggest contraction in just more than a year.From Tuesday to Friday, South Africa will host a regional meeting of ministers responsible for electricity and water to discuss strategic regional priorities aimed at strengthening energy security, improving water resource management and advancing sustainable socio-economic development across the Southern African Development Community.On Wednesday the Bank for International Settlements (BIS) will publish a working paper on geopolitical risk and emerging market sovereign risk premiums.In its recent global economic outlook, the BIS warned that the supply crisis in energy and other raw materials triggered by the closure of the Strait of Hormuz had posed a threat to the global economic outlook that may linger despite easing geopolitical tensions and a big drop in oil prices.It said policymakers must prioritise price stability, strengthen financial stability and ensure sound monetary and fiscal foundations to ensure sustainable growth.
