With the New Year just a few hours away, economists have painted a bleak commercial picture for 2020.
Dawie Roodt, chief economist at Efficient Group, said he feared South Africa was heading towards a full-blown recession. “Given the devastation wrought by load shedding and the government’s rapidly growing debt burden, I think things are going to get a lot worse before they get better,” he said.
The high fiscal deficit was his biggest concern, making it difficult for the government to borrow money to keep the economy going, Roodt said.
Miyelani Mkhabela, economist and director at Antswisa Transaction Advisory, said he doubted South Africa would get itself out of trouble next year if there was no clear vision from President Cyril Ramaphosa.
He expected the fuel price would go down in the first few months of the year, and then up in subsequent months, following international trends. He said he had not seen any reason to make the Organisation of Petroleum Exporting Countries (Opec) raise oil prices so far.
He said the transport industry would get relief with the lower fuel prices, but was not sure if this would spill over to the food industry.
He said people should save money in the weak economy, as consumers were using their credit cards to their limits. A culture of investment should be created.
Neil Roets, chief executive of Debt Rescue, said the prices of goods went up but salaries stayed the same and there was nothing indicating 2020 would be better than 2019. Roets said that even though the situation looked dire, people were still spending money.
“In December, people max their credit cards out,” he said.
Mervyn Abrahams, programme co-ordinator at NGO Pietermaritzburg Economic Justice and Dignity Group, said they always lived in hope that things would get better and wanted people to work towards improving their situations. But 2020 would likely be worse than 2019 and he did not see things getting better on the job creation front. Eskom wanting a 17% tariff increase would not make things any easier, Abrahams said.
“The poor have tightened their belts to the point where there is no belt to tighten.” he said. The government needed to create a sense of optimism by arresting people for corruption.