Many economists, financial pundits and government officials have become too obsessed with minuscule decimal differences in the economic growth of South Africa’s more than three trillion-rand economy. But who should care if the economy grows by the existing consensus expectation of 0.5% in 2019 or by 0.3% that will result if GDP growth is less than 1.0% in the fourth quarter? ...

Stats SA released economic growth figures for the third quarter this week, and told us that the economy contracted by 0.6%, on a seasonally adjusted and annualised basis. This disappointing outcome mean that for economic growth to average at the current consensus expectation of 0.5% in 2019, the economy must expand by a whopping 4.1% in the fourth quarter, which by any imagination seems too far-fetched. ...

This year, global markets have been volatile and domestic developments have been both encouraging and painful. The volatility in markets has been largely driven by chaotic and inward-looking global trade policy, which weakened growth in trade volumes, business confidence and fixed investments, and subsequently weakened economic growth in several key economies....

The economic policies made by the government and the accompanying legislation to enforce it must benefit the majority of the South African public. If it so happens that policy benefits a minority population (intended or unintended), that policy must not make the remaining majority worse off, as it is far easier to address a negative externality on a minority population than on majority.  ...

Finance Minister Tito Mboweni will table the Medium Term Budget Policy Statement (MTBPS) on Wednesday, October 30, wherein it is largely expected that the fiscal trajectory will worsen compared to the February Budget Review. ...

I have been on the road across the major cities of South Africa for the past two weeks talking to some of the more than sixteen million members of pension funds, who collectively own R4.3 trillion in retirement funds. These members are the real investors as they ultimately own the funds invested by various asset managers on their behalf, and they are worried.  ...

This week National Treasury borrowed US$5 billion (roughly R75bn) worth of bonds from international capital markets, with US$2 billion maturing in 2029 (10-year) and US$3 billion maturing 2049 (30-year). This is the biggest ever euro bond the country has issued, which Treasury has interpreted to mean that it’s a show of confidence on South Africa, and I agree in part. Raising funding has never really been an issue, it is the price of that debt that matters. Those outside financial circles have been talking and mostly bemoaning why Treasury is pilling on foreign debt when it needs to reduce it. ...

There is a false sense of comfort that has swept through the political and part of the financial circles following Moody’s comments that there is a low probability of a credit rating downgrade over the next 18 months. A credit rating downgrade was never a high probability in 2019 but a change in outlook from stable to negative was. That has not changed, I believe Moody’s will likely change the outlook to negative from stable on 1 November. Here is why.    ...

Some commentators have boldly predicted that the rand will likely weaken to 60 to the US dollar or more simply, that the rand will crash, and that South Africa is closer to approaching the International Monetary Fund (IMF) for a bailout due to the current bleak economic prognosis. ...