As 2024 draws to a close, investors are reflecting on a surprisingly strong year for markets. Despite significant geopolitical risk, global and local markets posted inflation-beating returns.
According to Sanlam Private Wealth, the JSE is expected to build on its 12% return in 2024, driven by lower inflation, lower interest rates and improved electricity availability. Additionally, the government of national unity (GNU) is expected to enhance confidence among both business and consumers.
David Lerche, chief investment officer at Sanlam Private Wealth, expressed a cautiously optimistic outlook for 2025. “The global economic outlook is mixed but the SA market is expected to experience growing momentum.”
“Assuming no major external shocks, this ‘self-reinforcing cycle’ should be positive for our local stock and bond markets, as well as our currency in 2025,” Lerche said.
On a global scale, Sanlam projects the US economy to remain healthy, with real GDP growth forecast at just more than 2%. In contrast, Europe is expected to experience slower growth at about 1%, while China’s real GDP growth may slow further to about 4%.
Inflation trends are also expected to vary across regions in 2025. The US is likely to see inflation at about 2.3%, while Europe is anticipated to experience inflation close to 2%. In China, inflation is expected to remain low, barely above zero. In SA, inflation is projected at about 4.3%, which is marginally below the midpoint of the SA Reserve Bank’s target.
While the outlook for 2025 is generally positive, Lerche cautioned that several risks and challenges could affect investors. Those included the potential for a global economic slowdown, tension in international trade — particularly under US president-elect Donald Trump's administration — and any significant external shocks.
So far, the JSE all share has gained 11.7% in the year to date, pushed higher by retailers, food producers, SA listed property, banks and financials, which were up 37%, 35%, 23%, 19.4% and 19%, respectively.
The rand is more than 1% stronger so far this year.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.