SA has 6-12 months to fix its political problems, said Investec Assest Management director Jeremy Gardiner.
The world was enjoying GDP growth across all major markets and growth in the US, Japan and Europe was benefiting emerging markets — but political interference weakened these benefits for SA, Gardiner said.
“We are in trouble and we need to be aware of that. It is such a pity, because at the beginning of 2017 SA was destined to grow again as emerging markets found favour again. SA is in trouble, but it has time to fix various problems while global growth comes under pressure,” he said at the 21st annual congress of the South African Council of Shopping Centers in Cape Town.
“That is how we started 2017, but then came the Cabinet reshuffle, which turned things around again. Pravin Gordhan had to exit his job purely for doing it properly.”
According to Fin24, Gardiner, all the ratings agencies is waiting for the outcome of the ANC’s Leadership election conference in December. If SA is downgraded even further, about R120bn of certain overseas investments in the country will be forced to be withdrawn, which will hit the Rand hard.
“We could so easily have avoided it. If the finance minister switch was not done, I think it was unlikely that we would have been downgraded.”
At the same time there are still some positive aspects that could impact the SA economy, in his view. The nuclear deal, which would have cost SA an added R1trn in debt, has been shelved for now due to civil society raising its voice in court.
Furthermore, commodity prices likely still go to rise; the drought ended; and inflation is slowing sharply.
With the South African economy remaining volatile and stagnant, it is now more important than ever to employ savvy saving tips to save for your retirement and any unforeseen expenses if you want to escape a life riddled with debt and consolidation loans.