Muddle-through scenario most likely after ANC leaders’ election
Fund managers prepare portfolios for compromise outcome rather than full-throttle growth
Few would disagree that SA faces significant economic and investment challenges in the days, months and even years ahead. SA has been left behind in a world that has generally experienced renewed economic vitality. While the rest of the planet is on average enjoying growth rates of about 5%, SA will be lucky to achieve growth anywhere close to 1% in 2017 and only marginally more in 2018. The South African Reserve Bank has estimated potential growth over the next three years at less than 1.5% a year, which is a huge underachievement, given that we are an emerging market with a strong, young, potentially employable demographic. SA’s potential annual growth used to be in the region of 3.5%, and the extent of underachievement is even more marked when considering that the National Development Plan has a growth target of 5.3%. A snapshot of SA does not reveal a pretty picture. We have a stubbornly high unemployment rate of 27% and an expanded unemployment rate (including those who would l...
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