On the Main Menu: Since the covid-19 pandemic hit South Africa’s shores, the South African Reserve Bank has gone to great lengths to easy financing conditions in the domestic economy. ...

On the Main Menu: One of the most frequent comparisons I have come across is that of South Africa and developed markets. It’s the most bizarre comparison one can make, but too often it is used to justify a view that says SA is the worst performing economy compared to “other” economies, or that its institutions are weaker than “other” countries. In the investment world, returns from domestic assets are compared with advanced economies to justify the need to shift funds offshore. ...

On the Main Menu: This week the SARB Monetary Policy Committee sits to decide on monetary policy, with an announcement to be made on Thursday. Out of 12 economists surveyed by Bloomberg, five expect the repurchase rate to remain unchanged while the remainder expects a cut of 25 basis points, which will take the repo rate to 3.25%, the median market expectations....

On the Main Menu: One of the most glaring consequences of the deep recession that has engulfed SA is that the economy has regressed to the 2007 real GDP level. To get further perspective, I go back to 2007 and look at GDP per capita — the average GDP each citizen in a country produces, ignoring that some are below working age while others are too old to work — and compare SA with 22 countries that had roughly the same GDP per capita of between $10,000 and $13,000 (at purchasing power parity)....

On the Main Menu: Before the COVID-19 pandemic landed on South Africa’s shores, the economy contracted for three consecutive quarters from 3Q2019 to 1Q2020. Yes, these were mild compared with the second quarter of 2020, but the point is that the economy was already sick with glaringly obvious growth negative conditions prior to the COVID-19 pandemic....

On the Main Menu: GDP statistics were released yesterday and they showed an economy in deep recession. Growth contracted by 51% q/q seasonally adjusted and annualised (saar), much worse than the Bloomberg consensus expectations for a contraction of 47.2%. The South African Reserve Bank had expected 40% q/q saar contraction. The unannualised contraction is 16.4% q/q, while is we compare with the second quarter of 2019 (the y/y figure), the economy contracted by 17.2%....

On the Main Menu: Stats SA will release economic growth statistics today, which will show an economy deep in depression. Some woke economics pundits are likely to disagree with me on calling the state of the economy to be in depression. But to be frank, the economy has been weakening for more than five years consequently....

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On the Main Menu: Back in mid-February 2020, the US-China phase one trade deal came into effect. China committed to buy US$200bn worth of US goods and services between 2020 and 2021 with 2017 levels of trade as a base. This brought a pause in the trade tensions that have introduced recurrent volatility in financial markets for some time.    ...