A dream deferred
Synopsis:- South Africa’s economy contracted in the second quarter largely due to the spike in global fuel prices.
- Fuel prices have surged again in recent weeks, and will put fresh downward pressure on economic activity in South Africa and the rest of the world.
- The expected acceleration in local economic growth will therefore likely be delayed, but not permanently.
- Important structural reforms will raise the medium-term growth potential of the economy, while precious metals prices remain an important tailwind.
- Combined with reasonable valuations, this means the outlook for real returns from domestic asset classes remains favourable.