As predicted, South Africa is in fact not currently in a recession and this is good news for consumers as well as investors. We believe there are still promising local investment opportunities for investors who are bullish about local growth.
The South African economy has recovered from a 1.2 percent decline in the first quarter of this year and has advanced an annualised 3.3 percent. This was also the highest growth rate since the end of 2014 and is mainly due to a boost in manufacturing, mining and real estate activities.
What can we expect from South Africa’s GDP?
Some positive developments seem to be on the cards in the areas of legislative and taxation frameworks that credit agencies will be monitoring closely. Big decisions need to be made by the end of the third quarter, yet these decisions will be made before any figures are released. A downgrade for South Africa’s economy, however we remain optimistic that this will be avoided.
In terms of inflation, we still expect a 0.25% interest rate hike of 0.25% to push up inflation before 2017. This despite an improvement in volatility drivers such as the rand exchange rate and the oil price.
Investors should beware of debt
It is always important to look at the security of your source of income. It is crucial to speak to an accredited financial advisor to help you plan for unforeseen expenses and changes in markets and/ or personal circumstances.
National Wills Week
Estate planning and the drafting of a will are essential for all South Africans, regardless of age or financial position. Therefore, in the spirit of National Wills Week 2016, taking place from Monday 12 September to Friday 16 September, Ecsponent Financial Services in partnership with FinLead, will be offering the drafting of free basic wills. Request yours here.
Market news – many more local investment opportunities
The rand strengthened by 0.89% against the dollar, while the NASDAQ shed 1.68% in the last seven days. This was mainly due to the threat of potential interest rate hikes by the Federal Reserve Bank.
South Africa offers great investment opportunities for growth. And with US elections still ahead, investing your money internationally may lead to more uncertainty than solid growth.
A heads up
Many international companies are releasing their half year results soon. This offers investors the opportunity to revise their investments to make sure they have a balanced, diversified portfolio.