Economy in 2021: 'Expect a better year for South African assets'
The South African economy, in 2020, suffered its deepest recession in 110 years.
With mass vaccinations against Covid-19 on the horizon, 2021 will almost certainly be better – barring any other “Black Swan” events.
The Money Show’s Bruce Whitfield asked Jeff Schultz, a senior economist at BNP Paribas SA, to provide an outlook for the economy in 2021.
Trending, right now, in "business":
Schultz is not ruling out another rate cut this year but expects the South African Reserve Bank’s Monetary Policy Committee to remain on hold in the coming week.
He forecasts 2.5% GDP growth for 2021.
There are, however, many headwinds to recovery, chief among them Eskom’s failure to produce enough electricity
Schultz expects a better year on the Johannesburg Stock Exchange, driven by China’s booming economy (he expects growth of 9.5%), continued money-printing in the rich world, improved metal prices and ongoing low inflation and interest rates.
We don’t rule out a rate cut... There are now additional lockdown measures… we’ve had benign inflation, and upside growth surprises, so it’s a mixed bag. I don’t rule out the possibility of a 25 basis points cut, but we think the central bank will remain on hold next week.Jeff Schultz, senior economist - BNP Paribas SA
The recovery in 2021 was probably going to disappoint many expectations… a lot of structural weaknesses such as electricity supply is pertinent right now… It’s going to be another tough year. We did not get off to a strong start.Jeff Schultz, senior economist - BNP Paribas SA
There’s this dichotomy between booming stock markets, stronger emerging market currencies but still a very weak macro-economic background…Jeff Schultz, senior economist - BNP Paribas SA
We see China growing at 9.5%... the US Federal Reserve continuing unabatedly with its QE programme, a weaker US dollar that’s propping up metal prices, and low-for-longer domestic inflation and policy rates environment. It lays the basis for trade- and current-account surpluses in South Africa and probably a better year for rand assets.Jeff Schultz, senior economist - BNP Paribas SA
Listen to the interview in the audio below.
Source : https://www.123rf.com/photo_98751652_jse-limited-previously-the-jse-securities-exchange-and-the-johannesburg-stock-exchange-is-the-larges.html
Zero-interest shopping loans are disrupting lay-bys. The Money Show’s Bruce Whitfield interviews PayJustNow CEO Craig Newborn.Read More
"South Africa might just surprise to the upside," says Quintus Kilbourn, Head of Equities: Absa Corporate and Investment Banking.Read More
"Both are long-term savings vehicles with certain tax advantages," explains Michael Kirkpatrick of Alexander Forbes.Read More
Bruce Whitfield asks personal finance advisor Warren Ingram to explain in detail the new laws affecting provident funds.Read More
You can buy R1 (or even one cent) worth of shares. "The key to getting started is to get started," says Charles Savage.Read More
Need new wheels? WesBank’s Lebogang Goaaketse discusses a popular method for making repayments more affordable.Read More
Distressed properties on auction are going for a song. Bruce Whitfield interviews property economist Francois Viruly.Read More
"It’s mandatory for medical schemes to pay for for the Covid-19 vaccine," says Dr Ryan Noach, CEO at Discovery Health.Read More
Investors are getting ahead of themselves, warns Pieter Hundersmarck, a fund manager at Flagship Asset Management.Read More
Bruce Whitfield interviews Tinashe Ruzane of FlexClub, where you can choose from a variety of car subscriptions for a monthly fee.Read More