What’s New

Last week, the South African Reserve Bank (SARB) increased interest rates for the eighth consecutive time since they started their rate-hiking cycle in November 2021. Since then, the prime interest rate has increased by 3.75% to 10.75%, its highest level since 2009. This means that every R1 million debt that a household has, will now be roughly R3 125 more expensive each month; a thought that is keeping many South Africans awake at night.

Here we are, another new year with all of its potential, whether good or bad. Most investors seem anxious, and for good reason, as the last few years have not been kind. So, what do we expect from 2023? Well, first, it is important to remember that forecasts are, at best, well-informed guestimates. We do not have a crystal ball; we simply use our experiences and historic data to mathematically extrapolate what can potentially occur in the future.

Finally, we come to the end of another volatile year that tested the best of us. Since the latter parts of 2018, global markets have not been kind towards investors. Markets fell by roughly 15% in the final stretches of 2018, then recovered, and then the COVID-19 pandemic in 2020 beat down the markets by more than 30%. After governments stepped in with substantial fiscal and monetary support, which ballooned debt and overstimulated demand even more, the recovery was quick.