Little hope for the rand, analysts

It amazes me to read predictions from analysts such as RMB’s John Cairns and Chris Turner of ING group that the rand will rebound by year end. It has dropped 7% from September 6 and their pronouncements were the same day that the IMF gave us another thumbs down, by dropping our GDP for the year to a measly 0.7%.

All the countries mentioned in their report have their GDP growing and even Greece will have a 2.3% growth.

I am not even mentioning China, which is projected at 6.8%.

Are these analysts taking into consideration that – on top of all the fundamentals and negative readings that we get and the warnings from the rating agencies about our pathetic performance as a country – we have another big sword hanging over our heads (or maybe a few of them): the rand remains very sensitive to our political developments.

The weak economic growth, the oncoming train of another downgrade, the medium term budget on October 25 are all factors.

The medium term budget has been projected to have a black hole/short fall of R50 billion.

Inflation will be on an upward trajectory with the petrol increases working through the system and the battle to succeed President Jacob Zuma, which has frozen anything else going in the government related to our economy. Jean Michel, Bryanston