South African Reserve Bank establishes March 2022 as the latest reference peak in South Africa’s business cycle

The South African Reserve Bank published a Quarterly Bulletin article dating the most recent reference turning points in South Africa’s business cycle. The analysis reaffirms April 2020 as the reference trough and sets March 2022 as the subsequent reference peak, marking the start of a downward phase from April 2022, with no clear new trough yet identifiable. The article explains that the SARB dates turning points using a growth-cycle approach focused on fluctuations around long-term trend, combining composite leading, coincident and lagging indicators with diffusion indices constructed from 156 seasonally adjusted economic time series. Trend estimation again uses a Hodrick–Prescott filter (λ = 108 000 for monthly series) with an augmented two-step approach to address COVID-19-related outliers. While different statistical measures pointed to different candidate turning points over 2022–2024, the SARB selected March 2022 on balance, citing a marked loss of momentum from the second quarter of 2022 and noting that a brief 2023 improvement appeared narrow and driven by idiosyncratic factors such as temporary public-sector hiring, a low-base recovery in passenger rail journeys and a short-lived surge in renewable-energy investment. The SARB notes that structural constraints and successive domestic and global shocks contributed to weak, volatile post-pandemic growth and complicated cycle dating. It will review the possible emergence of a lower turning point periodically as additional data become available.