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Times are tough, but we’ve been here before

19 October 2016

With concerns around the country’s current uncertain political and economic outlook intensifying, markets are bracing for a possible sovereign downgrade. While a downgrade will not be good news for the South African economy, in a number of instances the financial markets appear to already have discounted the event in prices.

Downgrade fears reignited

17 October 2016

Once more, the position of South Africa’s finance minister is in question. The rand fell sharply when news broke that Finance Minister Pravin Gordhan has been summoned to appear in court in November. He faces a fraud charge for what the CEO Initiative has termed “essentially an administrative and human resource matter” for his role in granting former SARS deputy commissioner early retirement. Gordhan is due to present the Medium Term Budget Policy Statement (MTBPS) or the ‘mini-budget’ in two weeks’ time, but it is unclear whether he will still be in his post. The MTBPS will largely be finalised by now, and therefore the content is unlikely to change even if Gordhan was not delivering it. However, this creates uncertainty, and financial markets don’t like uncertainty.

Investing in a low-growth world

04 October 2016

Global growth continues to disappoint. The Organisation for Economic Co¬operation and Development (OECD), a club of the world’s most advanced economies, recently revised their global growth forecasts for 2016 and 2017 down to 2.9% and 3.2% respectively. The OECD joins other multi-lateral organisations (such as the International Monetary Fund, the World Bank and the World Trade Organisation), central banks and private sector economists in cutting forecasts. The actual global growth rate has remained resilient at around 3% per year since 2011, close to its longer-term average. The disappointment stems from the failure to accelerate beyond that rate.

From Muddling to Miracle: The path to maintaining SA’s credit rating

02 October 2016

I have previously referred to the South African economy as just muddling along – we aren’t shooting the lights out, but we haven’t sunk into the depths of a recession. But wouldn’t it be awesome if we could break out of our no-growth shackles? We can. And it’s not far-fetched either.

quick poll

Question

If you had to hazard a guess, when do you reckon the COFI Bill will be signed into law?

Answer

2026, as promised 2027 looks more likely Impossible to say More consultation needed

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