As was widely expected, the Monetary Policy Committee (MPC) again decided by a vote of three to two to continue to keep interest rates on hold, following a similar decision at the previous meeting of the MPC on 20 July.

Prof Raymond Parsons, economist from the North-West University (NWU), says this further “hawkish pause” outcome was the right decision by the MPC, taking into account the overall global and domestic factors at present shaping South Africa’s economic environment.

The better-than-expected gross domestic product (GDP) growth of 0,6% in the second quarter of 2023 is welcome news, as it has extended its gains for a second consecutive time.

Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says this demonstrates a noteworthy degree of resilience in the economy. This has mainly been the outcome of more moderate Eskom blackouts in June compared with April and May, together with other mitigating factors that helped to generate better growth figures.

“The watershed 15th BRICS Summit that took place in Johannesburg had, to its credit, several runs on the scoreboard by the time it concluded last week.”

Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says while the outcomes were inevitably a complex amalgam of politics, economics and business, the overall BRICS profile and agenda have been taken to the next level.

Good economic news is that the consumer price index (CPI) (headline inflation) for July has again shown a welcome declining tendency, reaching 4,7% from 5,4% in June.

Prof Raymond Parsons, economist from the North-West University (NWU), says this is not only a two-year low for the CPI but is also much better than market expectations.

“Core inflation further moderated to a ten-month low of 4,7% from 5,0% in June. The omens for the inflation outlook in South Africa look promising.”

Young entrepreneurs from more than 70 small and medium-sized enterprises (SMEs) benefitted from a SME Business Finance Clinic hosted by the North-West University (NWU).

The Small Business Advisory Bureau (SBAB) of the NWU’s Business School, in collaboration with the Small Enterprise Development Agency (SEDA), recently hosted an SME Business Finance Clinic to empower young entrepreneurs and youth-owned cooperatives.

The primary goal of the clinic was to empower these young entrepreneurs by providing them with essential insights into SME financing and development support.

Hosted from 24 to 28 July at The Roots Lifestyle Centre in Potchefstroom, the MBA Winter Study School of the North-West University (NWU) Business School proved to be an enriching and transformative experience for all involved. The week kicked off with an array of insightful guest speakers, leaving the attendees both inspired and enlightened.

The Nedbank Capital Expenditure Project Listing, which shows a dramatic decline in fixed investment activity in the first half of 2023, flashes a strong red light about future investment and growth trends in the South African economy.

This is as persistent power outages, rising interest rates and cost pressures weigh on profitability and erode business confidence.

As was widely anticipated, the Monetary Policy Committee (MPC) decided by a 3:2 majority to keep interest rates on hold for now, instead of opting for a further increase of 25 basis points.

In commenting on the MPC’s decision on 20 July, Prof Raymond Parsons, economist from the Business School at the North-West University (NWU), says it was the right call by the MPC, given the latest global and domestic economic cross-currents, as well as the cumulative impact of previous rate hikes on the economy.

During the fourth Pitso for 2023, Prof Raymond Parsons shared the Policy Uncertainty Index of the NWU Business School for the second quarter, which sparked an insightful discussion on its implications for the economy. The experts delved into the current standing of the index and explored potential remedies for prevailing crises that hinder much-needed economic growth.

“It is welcome but not unexpected good news that headline inflation (CPI) for May has continued to show a declining trend.”

In commenting on the CPI, Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says that although food costs remain high, the overall downward trend in headline inflation is converging on earlier consensus expectations of South Africa getting closer to the goal of price stability in the months ahead.

He points out that core inflation remains stubborn for now, however.