Looking ahead: Investec Asset Management director Jeremy Gardiner. Picture: HETTY ZANTMAN
Looking ahead: Investec Asset Management director Jeremy Gardiner. Picture: HETTY ZANTMAN

SA has six months to a year to fix its political problems, says Investec Asset Management director Jeremy Gardiner.

The world was enjoying GDP growth across all major markets and growth in the US, Japan and Europe was benefiting emerging markets — but political interference weakened these benefits for SA, Gardiner said.

"SA is in trouble, but it has time to fix various problems while global growth comes under pressure," he said at the 21st annual congress of the South African Council of Shopping Centres in Cape Town.

"The UK was the most desirable developed market for investment two years ago, now it is the worst developed market, however, it is still growing. But Europe has managed a soft landing and China has improved its position and growth is around 6% and 7%," said Gardiner.

Only 9% of SA’s debt is foreign-denominated and 91% is local. The sovereign ratings agencies will probably comment two days after the ANC leadership conference in December, according to Gardiner. Food prices were falling as the drought had ended across much of SA. Inflation should now fall, he said.

"Not doing the nuclear deal will save R1-trillion in debt we would have [had]. This would have added 50% to our debt. We don’t need the extra electricity until 2037," he said.

SA’s economy should remain in a stable position for six to 12 months, said Gardiner.

The country’s economic growth would gain some momentum in 2018, he said.

Nomura International recently revised its growth forecast for SA for 2017, from 0.2% to 0.6%.

Growth for 2018 was also revised from 0.7% to 0.9%, and its 2019 projection remained at 1.2%, said Nomura emerging markets economist Peter Attard Montalto.


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