FUNEKA MONTJANE: It’s time to choose wealth creation over consumption
Our economists have long forecast that the South African Reserve Bank, inspired by cooling inflationary pressures across much of the world, would this year begin to cut rates for the first time since the pandemic. This week’s global market sell-off has only served to add more pressure on the world’s biggest central bank, the US Federal Reserve, to begin cutting borrowing costs in that country, perhaps further solidifying the case.
It’s been a long wait, but the day is seemingly getting closer that the Lesetja Kganyago-led central bank will cut rates before the year is up, with a possible two further cuts in the first quarter of next year, according to our house view. Should our forecasts prove correct, the cuts will bring much relief to the strained wallets of households. And with consumer spending making up the largest percentage of our GDP, it should also boost our economic prospects to a certain degree...
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