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Economy 13 February 2020

Economy 2020

The Standard Bank Economy 2020 covers the outlook for the global, sub-Saharan and South African markets. From video interviews with our Chief Economist, Goolam Ballim, to an e-book offering in-depth research, we invite you to engage on the themes that will shape the year ahead.

A new year, a new decade – what lies ahead for the economy in 2020?

The relative global political calm of the 1990s, and the widespread economic buoyancy of the early 2000s are but a distant memory.

Instead, in the past decade, trade protectionism, Brexit, and marked economic weakness in Europe and China reduced global growth to its slowest since the financial crisis. And, sub-Saharan Africa had been ensnared, with resource-dependent economies most pressed, while South Africa attempted to unshackle from the yolk of earlier, marked political dysfunction.

Favourably though, nascent signals are that global growth will accelerate in 2020. The coronavirus is the most significant risk threatening to derail an otherwise improving global economic climate. Concerns surrounding the socio-economic and health implications of the virus remain elevated.

Nonetheless, in the event that the impact of coronavirus is short-lived, as it was with SARS in 2003, we expect buoyant global financial markets and steady economic growth in developed economies to boost economic growth in Africa. Notably, increased capital flows to Africa is underpinning economic growth in the medium term.

In South Africa, the year ahead may be a defining one politically. A relatively rare election-free calendar may allow a more assertive stance from government in resolving some of the country’s pressing structural challenges.

It is likely that the president will continue to err on the side of caution in this regard, offering incremental – though still meaningful – progress on matters related to economic policy and SOE restructuring. However, the fiscal and electricity crises will pressure the government to avoid further delaying decisive policy reforms.

In conclusion, at the onset of a new year and new decade, and although the world is replete with risks, global policymakers’ responses – largely monetary and fiscal stimulus – will cushion the global economy and financial markets. In turn, this will help buoy sub-Saharan African growth.

Goolam Ballim,
Chief Economist, Standard Bank Group