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'Signs of incremental progress in SA despite graft, blackouts, vaccine delays'

702 logo 702 2021-02-10
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No-one alive today has seen anything like the shake-up that we're seeing in global economies.

Bruce Whitfield, The Money Show host

The upheaval wrought by the global Covid-induced recession has been compared to the Great Depression of the 30s and the aftermath of World War II.

On the eve of President Cyril Ramaphosa's State of the Nation Address (Sona), Bruce Whitfield asks where South Africa fits into this picture.

He interviews Goolam Ballim, Group Chief Economist at Standard Bank.

I think there's a raft of positive shocks that will aid the [global] recovery profile in 2021 - and not just these positive interventions, but also more constructive than we would have anticipated a month or so ago.

Goolam Ballim, Group chief economist - Standard Bank

The geo-political environment is more becalmed because of US President Joe Biden. That immediately implies the risk in financial markets, the risk to global trade and... the pace of de-globalisation will slow

Goolam Ballim, Group chief economist - Standard Bank

Secondly, if 2020 was the search for the vaccine, 2021 is going to be the rollout... It will be more dominant in developed markets first and some smaller, more connected economies like in the Middle East...

Goolam Ballim, Group chief economist - Standard Bank

He notes that emerging markets will benefit from the global recovery halo, including African countries like South Africa.

Although the country is behind in terms of a vaccine rollout, it's not all bleak says Ballim.

Those that are familiar with South Africa's precarious position about a month ago... will know that notwithstanding the AstraZeneca stumble, in just the space of six weeks... South Africa has mobilised in a very short space of time.

Goolam Ballim, Group chief economist - Standard Bank

Another reason for optimism is the country's fiscal consolidation process, he says.

I think the conviction that has been shown by the National Treasury in, for example, containing general expenditure with emphasis on the public sector wage bill has really granted credence. Of course the Appeal Court and Constitutional Court ruling in favour of Treasury rather than labour's demands for that third year of payouts, speaks further to fiscal consolidation.

Goolam Ballim, Group chief economist - Standard Bank

Ballim also cites the predicted revenue overrun for the current fiscal year.

He concedes there is still "a lot that can go wrong", but says judgment should take into consideration incremental upside as well as downside risk.

My view is that now, one-and-a-half months into the new year, the outlook in terms of the risk profile suggests that there's far more upside [to consider].

Goolam Ballim, Group chief economist - Standard Bank

At least on the points that I've mentioned there has been improvement in terms of probability and the potential of those good news events coming to pass.

Goolam Ballim, Group chief economist - Standard Bank

What can go wrong? Well, electricity will continue to curtail our mood and it will probably cause a stutter in terms of investment this year.

Goolam Ballim, Group chief economist - Standard Bank

More revelations of public as well as private sector malfeasance will also dampen the mood of the nation, but we should cling to the notion of an incremental government re-set, he says.

Listen to Ballim's positive-leaning analysis below:

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