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Watch this space- SONA setting the tone for 2019 South Africa economic outlook?

By Munozovepi GwataMarket OverviewFeb 08, 2019 13:51
za.investing.com/analysis/watch-this-space-sona-setting-the-tone-for-2019-south-africa-economic-outlook-200198148
Watch this space- SONA setting the tone for 2019 South Africa economic outlook?
By Munozovepi Gwata   |  Feb 08, 2019 13:51
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The state of national address solidifies the start of a new year. It sets the tone for what to expect from government and what are the primary focuses for the year. From the address, we can deduce what the economic outlook for the country maybe in the upcoming year.

Last year the South African economy went through quite critical hallmarks. We experienced a technical recession, high rates of unemployment amongst other things which made the South African Rand volatile and vulnerable. The vulnerability and volatility of the Rand was particularly exposed last year with the crash of Turkey’s Lira. Therefore it is needless to say that this year we wish to see a much stronger Rand that is representative of a strengthening South African economy.

The state of national address is not like the national budget speech in which you can easily deduce economic inferences from its deliverance. However, there are some key components that were mentioned and emphasised in the state of national address that may have economic implications.

The first two things that proved to be a golden thread running through the address was the focus on economic growth and job creation. Economic growth is vital to attract investors to the South African economy. As it stands South Africa has not been experiencing rapid economic growth and the slow rate of growth is correlated to and reflected in the increasing rate of unemployment. The rate of unemployment in South Africa is increasing at alarming rates that can have a gross negative impact on the economy.

Perhaps these two problems can be partially remedied through the mining sector. President Cyril Ramaphosa drew much attention to the developments made within the mining sector. The mining sector is a critical contributor towards the growth and development of the South African economy. Therefore, policy strides in this business sector as mentioned in the state address may contribute towards economic growth and job creation.

The last significant component that was mentioned in the national address that may have positive economic implications, is the emphasis to combat and fight corruption. In the past few years South Africa has encountered corporate scandals that have impacted share prices and the integrity of the market. A strong stance against corruption can create a sense of hope that future corporate scandals will be kept at bay.

Therefore based on the state of national address we can place an emphasis on monitoring the rate of economic growth, the rate of employment and the rate of growth in the mining sector as indicators of South Africa’s economic performance and potential. Furthermore, we can do so with anticipation that integrity will be upheld in the South African financial markets.

Watch this space- SONA setting the tone for 2019 South Africa economic outlook?
 
Watch this space- SONA setting the tone for 2019 South Africa economic outlook?

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Thandeka Maphumulo
Thandeka Maphumulo Feb 08, 2019 17:21
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Every year same "prepared" speech to fool the country.
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Tsebo Matshela
Tsebo Matshela Feb 08, 2019 16:02
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Nothing has changed really, same speach, different wording, different individual but same everything...
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Reuben Hawley
Reuben Hawley Feb 08, 2019 15:52
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smoke and mirrors. every year its the same story. promises are made and fancy words used but very little actually gets done
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