Professor Waldo Krugell is a professor of Economics at the North-West University. He holds an MSc in Economics from the University of Warwick and a PhD on the topic of the geographical economy of South Africa from NWU.

Economic growth, he believes, affects all of us in South Africa. “There was growth in the first quarter, but in the second and third quarters, it has contracted. This is due to slower economic growth internationally but also loadshedding.”

Professor Krugell adds that the economy has been on a downward swing in the last two months of 2022. This downward swing he believes is due to the effect of loadshedding on manufacturing and mining. 

“We may be looking at another repo rate increase after the Reserve Bank’s final meeting at the end of November,” adds Professor Krugell.

The Reserve Bank committee may be concerned about a high inflation rate and a high wage demand cycle. “They are also keeping an eye on the USA economy and the interest rate decisions by the USA Federal Reserve Bank. If the Federal Reserve Bank raises interest rates, we will have to follow in order to support our bond market and exchange rate,” Krugell says.

This is a very challenging environment for businesses and, according to Professor Krugell, economists are keeping an eye on the coming Black Friday sales to determine consumer sentiment.

Professor Krugell warns that consumer debt, something that consumers are considering for the festive season, is not sustainable. “These are tough times and it’s worth seeing through in the hopes of it getting better next year.

Households can breathe easy until the next national budget speech, says Professor Krugell. “There are no looming tax increases. There are challenges but they won’t affect the current budget cycle. It is a positive picture from the government.”

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