Kamini Naidoo

In the next year, we expect that lower interest rates, higher disposable income (due to a fall in inflation), mild employment gains, and early pension withdrawals should underpin a recovery in consumption locally. Moreover, the government of national unity and the renewal of Operation Vulindlela’s term present an opportunity to expedite growth-friendly policies in areas that include logistics and water, allowing for a shift to a higher growth trajectory.

Globally, tempered inflation and contained inflation expectations have allowed central banks to consider rate cuts, though substantial easing beyond neutral rates seems unlikely. Central banks are expected to maintain cautious rhetoric to manage inflation risks.

Expensive US valuations remain a big constraint for future global equity returns. With South African equities trading at significant valuation discounts compared with global benchmarks and historical averages, we continue to favour domestic asset classes as we approach the fourth quarter.