International Monetary Fund. Western Hemisphere Dept.
INTERNATIONAL MONETARY FUND
This paper estimates the impact of China's growth slowdown and the recent large decline in commodity prices on South Africa. It seeks to identify the key channels through which shocks to China's economy are transmitted to South Africa, as well as the propagation of these shocks within the economy. The paper also discusses key macro-financial linkages and related risks in the South African economy, focusing on downside scenarios that are not part of the baseline. South Africa's high reliance on external financing, with banks intermediating a larger share of capital flows in recent years, exposes it to the risk of capital flow shocks.