While monetary policy is sure to provide some relief to the economy, much more is required from policymakers and all stakeholders in the economy, writes Bernard Drotschie
While monetary policy is sure to provide some relief to the economy, much more is required from policymakers and all stakeholders in the economyFinance Minister Tito Mboweni. Date: February 26, 2020. Picture: ESA ALEXANDER/SUNDAY TIMES
SA investment markets have in the meantime been following global markets higher as risk aversion subsides. From its lows in March, the JSE all share index has already rebounded 35%, driven by a sharp pick-up in the share prices of materials and some of the index heavyweights such as Naspers. The Reserve Bank has played an important role in stabilising the funding market when liquidity in the secondary markets dried up during the crisis as foreign investors were exiting all emerging markets, including SA.
All eyes are now on Wednesday's emergency budget. With an expected revenue shortfall of R285bn and a budget deficit of at least 15% of GDP this fiscal year, the minister will have his work cut out for him in preventing further sovereign downgrades by the respective credit ratings agencies. More detail is expected with regard to funding of government’s R500bn economic and social relief package announced in April. The objective of the relief programme is to strengthen the healthcare system and to provide income and funding support to companies and individuals who have lost their jobs.
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