Summary of macro-economic research views:


  • Inflation: Inflation is on the way back down and likely to approach the 4.5% midpoint of the inflation target range by around the middle of 2024, offering the SARB scope to consider reducing interest rates.
  • Repo rate: The SARB kept the repo rate unchanged at 8.25% to confirm that barring any significant currency crisis, that interest rates have peaked. The consensus expectation is that rates will decline by at least 75bp through 2024.
  • Government Finances: SA’s government finance statistics show that the trend is deteriorating and that overall debt levels are expected to steadily increase through the months ahead. It implies that foreign investors will perceive greater levels of risk associated with investing in SA.
  • GDP Growth: GDP growth has fallen back to 0%. The economy remains hobbled by poorly run SOEs that have placed a massive constraint on growth. These SOEs have hampered electricity production, logistics and efficiency at SA’s ports. There is no obvious reason to expect GDP growth to pick up, especially as global growth is expected to slow.
  • Currency: The ZAR continues to trade at a discount as investors position for the many risks and challenges that SA faces. Against the USD, the EUR and the GBP, the balance of probabilities still favours exporters taking out forward cover as the probability of beating the prevailing sport rates in twelve months’ time is comfortably higher than not
  • Offshore Conditions: Global growth is expected to slow through H1 2024. Although there are sometimes conflicting data sets that show that the US economy is surprising in its resilience, the general trend continues to favour a weaker growth trajectory that will likely encourage the Fed and other central banks to reduce interest rates.
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