Economic Predictions For South Africa In 2019
Policy failure, lack of economic growth and political distractions that plagued 2018 could well be the foundation for another dismal year, with expectations of a plummeting rand/dollar exchange.
As well as 2019 general elections people have awaited for that to gain more clarity in terms of what the New Year will bring. This is one of the most critical national elections since 1994, which will have significant repercussions for the country’s economic and political future.
Other economic predications include Eskom. If South Africa doesn’t resolve the loadshedding crisis the country will be downgraded to junk status. This will undoubtedly have a negative effect on both the economy and on investors.
Experts have recommended to President Cyril Ramaphosa that Eskom should be split up into three different firms’ generation, distribution and transmission. Ramaphosa is expected to release an Eskom turnaround strategy in the coming weeks.
Also new finance minister Tito Mboweni who presented a bleak mid-term budget in October is due to release the full budget in February. The medium term policy reflected a downward trend of economic growth and rising unemployment figures, which could point to further credit ratings downgrades during the course of 2019.
And the push for land reform and particularly land expropriation without compensation could have dire economic consequences. While investors may agree that land reform is necessary to address inequality. But it could undermine property rights, collapse local banks and further discourage foreign investment. There’s little doubt that this issue is a key factor impacting market uncertainty.
Moreover, the world is watching to see how much of a rear-guard action Zuma and his allies will be able to perform. This is because addressing and combatting corruption is pivotal to any economic upliftment that can take place going forward. Corruption dwarfs the price of gold and has far reaching effects on economy.