The state of SA’s economy three months after the general election is the focus of this edition of Business Day Spotlight. Mudiwa Gavaza is joined by Sanisha Packirisamy, chief economist at Momentum Investments Group.
The discussion gives a pulse check how the economy is performing, both locally and internationally.
Following May’s election result, Packirisamy says the market has welcomed pledges for market-friendly policies and sustainable income support, but sustained investor confidence will depend on the government of national unity’s (GNU) early reform achievements.
“Rising investor confidence, in response to ongoing structural reform and an improvement in accountability and governance, provides upside risks to our growth forecasts of 1% this year and 1.7% next year. On a three- to five-year view, we see growth reaching 2.5% as reforms gain momentum,” she says.
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Like other market players, Momentum expects that the SA Reserve Bank will start to cut interest rates from September. While there has been criticism from a number of corners that the US Fed, which many central banks take a lead from, has been too slow to cut borrowing costs, Packirisamy says it is too early to tell.
The discussion highlights Momentum’s SA economic report for July; market perceptions of SA’s GNU; policy reforms needed to restore confidence over the long term; the effect of elections; and the move by central banks to start cutting interest rates.
• Business Day Spotlight is a MultimediaLIVE Production.
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