The Big Think an independent review on South Africa ’ s economy
By Dr . Roelof Botha , Economist
Many people might not be positive about what the future holds for South Africa ’ s economy . Eternal optimist and well-known economist , Dr Roelof Botha , believes there are enough signs to show all is not doom and gloom .
The New Year is off to a rollicking start , with capital market volatility already having led to frayed nerves among investors all over the world .
Inflation in the US has increased to its highest level in four decades , the Nasdaq 100 index is down by more than 10 % this year , Russia attacked the Ukraine , entrepreneurs are fleeing Hong Kong and global warming continues to play havoc with weather patterns .
On top of this combination of heightened geo-political tension and economic uncertainty , the coronavirus causing COVID-19 lingers on in terms of new waves and variants , although many international travel bans have been lifted .
On the domestic front , the JSE all-share index took a knock of more than 34 % in the space of less than a month just before the first lockdown regulations were implemented early in 2020 , but then gained 81 % since then and reached an all-time high of more than 76 000 on 20 January this year .
Currencies and equity market trends have become nigh impossible to predict , especially in emerging market economies . This is clearly illustrated by the following movements of the rand / US dollar exchange rate :
• Between early January 2020 and 6 April 2020 : 27 % depreciation .
• Between 6 April 2020 and 7 June 2021 : 42 % strengthening
• Between 7 June 2021 and end November 2021 : 18 % depreciation .
• Between 28 November 2021 and 24 January 2022 : 8 % strengthening .
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