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Concerns raised over state of SA economy going into 2019

While emerging markets have come under pressure, ratings agencies have expressed their concerns about a number of challenges facing South Africa.

Picture: Pexels

CAPE TOWN - With the Johannesburg Stock Exchange (JSE) under pressure over the past several weeks, there are concerns that the worst is not over just yet.

While emerging markets have come under pressure, ratings agencies have expressed their concerns about a number of challenges facing South Africa.

Consumers have also been affected by the struggling economy with the general cost of living increasing at a rapid rate.

However, economist Azar Jammine says the continued drop in the oil price is helping consumers.

“The fact is that the fall in international oil prices, fortunately for South Africans, has been so steep that it far outweighs the impact of the weakening rand. And motorists can look forward to a dramatic further reduction in the price of fuel next week and we hope that can be sustained through for the next few months.”

Meanwhile, Jammine has flagged trade union activity, uncertainty in the run-up to the general elections, and the possibility of a drought as three of the key issues South Africa will face next year.

And there are also global factors that will affect the country. Jammine says one of those is the tightening up of global liquidity because of moves in the US.

“That withdrawal of liquidity is leading to anxiety that a lot of the money that has been flowing into financial markets might now start flowing out of the financial market and that would have a ramification one everyone. One of the effects on SA is that the rand has weakened anew.”

(Edited by Thapelo Lekabe)

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