Author: Prowess Investment Team

Last week, Finance Minister Enoch Godongwana’s finally delivered the 2025 Budget presentation, reaffirming a commitment to fiscal consolidation and implementing a phased VAT hike of 1%. This week, global markets are closely watching central bank monetary policy decisions, with the Federal Reserve (Fed), the Bank of England (BOE) and the South African MPC all due announce policy rate decisions. The MPC decision will likely be a close one, with a 25 bps rate cut not out of the question.

The South African Minister of Finance, Enoch Godongwana, delivered the 2025 Budget Speech on March 12th, mapping out his strategy for economic recovery while maintaining fiscal discipline. It is clear from the Minister’s speech that difficult policy choices were made, including a phased VAT increase and a renewed commitment to structural reforms.

Last week, US markets were spooked after tariffs against Canada and Mexico came into effect, with the S&P500 seeing its worst sell-off of the year in response to the news. Locally, although the Q4 GDP numbers showed a rebound from the contraction reported in Q3, the reported growth was still lackluster.

Global markets are currently navigating a complex mix of geopolitical risks, trade tensions, and domestic economic pressures while, locally, CPI in January came in at 3.2% as expected.

Last week, Finance Minister Enoch Godongwana’s 2025 Budget presentation was postponed to 12 March as GNU partners failed to find common ground on discussions surrounding a proposed 2% VAT hike. The Federal Reserve remains cautious about rate cuts as inflation risks persist.

Last week, inflation fears gripped markets as the US CPI print for January surprised on the upside. Locally, it was an eventful week that started with US President Donald Trump’s accusations of human rights violations against white farmers in SA.

South African investors are grappling with fresh tariff threats from the Trump administration after the recent executive order to freeze all aid to the country.

Last night President Ramaphosa delivered the 2025 State of the Nation Address (SONA). The theme for this year’s address was “A nation that works for all”. The address marked an important milestone as the President endeavoured to bring certainty to the country’s socio-political and economic landscape. There was a clear demonstration that the country’s democracy remains in robust and intact.

Global markets face uncertainty as the US Federal Reserve holds rates steady amid policy and trade concerns. President Trump’s suspension of US aid to South Africa over land expropriation policies raises diplomatic concerns. The SARB cut the repo rate by 25 basis points to 7.50% to support growth amid subdued inflation. Investors are focused on President Ramaphosa’s upcoming SONA this week, anticipating key economic policy updates amidst lingering geopolitical and inflationary risks.

Risk on sentiment continues to grip global markets as President Donald Trump continues to roll-out his trade tariff agenda. Locally, December CPI print surprised on the downside and all eyes are on the SARB MPC which is expected to deliver a hawkish 25 basis point cut to the repo rate.