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The JSE ALSI starts the year at 73 709.4 points and the yield on the 10-year bond at 9.35%. The South African Reserve Bank (SARB) increased the repo rate by 25 basis points following a similar increase in November 2021. Consumer price inflation (CPI) for January was 5.7% and the fuel price declined by 77c/l. The International Monetary Fund (IMF) forecasted lower global economic growth for 2022 and 2023, as well as higher CPI. Europe tightened lockdown restrictions in response to the COVID-19 Omicron variant. Tensions intensify between Russia and Ukraine and between China and Taiwan.


South Africa’s minister of finance announced lower personal income tax rates as the fiscal deficit came in much lower than budgeted due mainly to higher (mining) company taxes stemming from higher commodity prices. CPI remained at 5.7% and the fuel price increased by 55c/l. SA’s government released a report blaming factional battles in the ANC for the July 2021 unrest. Russia started a war against Ukraine, causing energy prices (natural gas and oil) to surge, fueling fears of higher CPI and faster increases in interest rates. The United Kingdom (UK) announces an end to COVID-19 restrictions. China and Russia oppose NATO expansion.


CPI for March increased to 5.9% and the fuel price increased by R1.46/l. The SARB raised interest rates by another 25 basis points. Other central banks such as the Federal Reserve in the USA (also 25 basis points) are increasing interest rates to contain runaway CPI, partly fueled by supply chain disruptions caused by among others, conflicts in the Ukraine and Middle East. More than three million Ukrainians seek refuge in neighbouring countries. The US announces a ban on Russian oil, gas, and coal as fears of a world economic recession increase.


South Africa is rocked by load-shedding and massive floods in KwaZulu-Natal, contributing to a weaker rand exchange rate and share prices and rising bond yields. CPI remained at 5.9% and the fuel price increased by 28c/l. South Africa’s National State of Disaster ends after 750 days. Globally the scene was dominated by rising fuel and food prices, lower world growth, China’s forceful COVID-19 lockdowns, the war between Russia and the Ukraine, increasing interest rates, and supply-chain delays. Pro-European centrist Emmanuel Macron is re-elected as president of France. Former Pakistan cricket captain and World Cup winner, Imran Khan is ousted as Pakistan’s prime minister after losing a vote of confidence in parliament.


CPI jumped to 6.5%, driven by rising food- and fuel prices. The SARB raised the repo rate by 50 basis points. Standard and Poor’s lifts the outlook on SA’s sovereign rating to positive. The war between Russia and Ukraine continues, while the world economy entered a cycle of high CPI, fast rising interest rates and lower economic growth, in an environment still plagued by COVID-19 lockdown interruptions. The IMF reduced their world economic growth forecast for 2022 from 4.4% to 3.6%, for 2023 to 3.6% and for 2024 to 3.4%, suggesting years of low growth. Brent oil jumps to $123 per barrel from just below $110 in April.


South Africa’s CPI increased to 7.4% in June, still driven by food and fuel prices, the latter increasing by R2.43/l. South African households’ wealth decreased by R1.3 trillion in Q1, driven by declines in the value of pension funds and unit trusts. Criminal charges of kidnapping, bribery, money laundering, and “concealing a crime” is laid against pres. Ramaphosa by former spy boss Arthur Fraser, following a theft of foreign exchange on Ramaphosa’s Phala Phala farm. Eskom workers went on a labour strike for higher salaries, causing stage 6 load-shedding. Ramaphosa increases the private electricity generation cap (without a license) from 1 MW to 100MW. The Federal Reserve in the USA hiked interest rates by 75 basis points. The EU agrees to ban most imports of Russian oil. Oil prices remain around $110 per barrel and natural gas prices quadrupled in Europe (tripled in Asia and doubled in the US), causing high CPI. China’s economy continues to struggle due to trade conflicts, the effects of the Russian-Ukraine war, the negative impact of higher international CPI and interest rates and strict COVID-19 policies.


The petrol price increased by R2.37/l and now was R11.62c/l higher than in January 21. The July increase contributed to CPI rising to 7.8%. The SARB raised the repo rate by 75-basis points to 5.5%. Eskom workers returned to work, but stage 5 load-shedding remain. The national treasury considers taking over some of ESKOM’s debt. The Federal Reserve hikes interest rates by 75 basis points and the European Central Bank (ECB) surprised by starting its interest rate hiking cycle with a 50-basis point increase. High oil and gas prices caused by among others Russia’s threat to halt gas delivery to Germany are causing countries to re-evaluate their carbon neutral objectives. Boris Johnson resigns as UK prime minister following a cabinet scandal. Mario Draghi resigns as Italy’s prime minister.


CPI continue to rise, albeit at a slight lower pace of 7.6%, assisted by a decline of R1.32/l in the fuel price. Load-shedding intensified further. An expanded world economic downturn - caused by politically driven supply disruptions, aggravated by interest rate increases, is forecasted to be very likely in especially Europe by the end of 2022. Oil prices declined due to fast increases in interest rates, fueling fears of a world economic recession. However, OPEC warns it may cut production to keep oil prices high – as Brent oil declined to below $100 per barrel. US Federal Reserve chairman, Jerome Powell, in his Jackson Hole speech, reaffirmed the Fed’s commitment to bring CPI under control. China engages in military drills around Taiwan following a visit by Nancy Pelosi, the speaker of the US House of Representatives.


Load-shedding continue as some power stations were sabotaged, while others failed. The SARB again raised the repo rate by 75 basis points. The petrol price declined by R2.04/l and CPI increased by a slower 7.5%. However, price increases became broad based as core CPI jumped to 4.9% from 4.6%. Stats SA announced the South African economy shrank in Q2, mostly due to the floods and load-shedding. South African household wealth declined by another R250 billion. With the world economy in risk-off mode, the rand weakened to more than R18/US$, also as the Fed raised interest rates by another 75 basis points. The US economy contracted by 0.6% in Q2, following a contraction in Q1 2022. The European Central Bank raised interest rates by 75 basis points. OPEC cuts oil production. Boris Johnson is succeeded by Liz Truss as UK prime minister. The UK caps energy prices for households and cuts taxes but fails to convince markets on the financing of these measures.


The minister of finance announced a smaller fiscal deficit for 2022/23 than estimated in February and said the government will take over some of Eskom’s debt and that the Social Relief of Distress grant will continue in 2023. Load-shedding continues unabatedly. The rand weakens further to R18.30/US$. Some 36 000 South African freight rail and port workers went on a two-week labour strike for higher wages. The petrol price declines by 89c/l. Fears of insufficient energy in many European countries mounts as Russia rations gas to the continent. Liz Truss resigns as prime minister of the UK (following a disastrous government budget which rocked financial markets) and is succeeded by Rishi Sunak. The European Central Bank raises interest rates by 75 basis points. The IMF estimates world CPI to be 8.8% in 2022 from 4.7% in 2021, and for world economic growth to slow to 3.2% from 6%. Italy’s nationalist right triumphs at a general election and Giorgia Meloni becomes the country’s first female prime minister. Former leftist Brazilian president, Lula de Silva, defeats incumbent, Jair Bolsonaro.


The 93 Octane petrol price in Gauteng increases by 53c/l to R22.57/l. South African public servants go on strike for higher wages. The South African Reserve Bank raises the repo rate by 75 basis points. Eskom forecasts continued load-shedding until 2027 as stages 4 to 6 are becoming the norm. The Federal Reserve increased interest rates by 75 basis points. The Bank of England became aggressive and raised interest rates by 75 basis points following two previous hikes of 50 basis points. The Soccer World Cup kicks off in Qatar. The Democrats perform better in the US midterm elections and maintain control of the Senate. Elections in Malaysia result in the country’s first-ever hung parliament.


The petrol price increased by 59c/l to end 2022 at R23.16/l. The petrol price increased by R8.47/l or 57.7% from January 2021 to December 2022. Stage 6 load-shedding continues as Eskom ran out of diesel and power stations fail. Andre de Ruyter resigns as Eskom CEO. Stats SA announces the economy grew by 1.6% in Q3 (from -0.7% in Q2), better than expected, putting the economy on course for 2.4% growth in 2022. CPI for November declined to 7.4% from 7.6% in October. The ANC-led majority in parliament rejected an impeachment process against pres. Ramaphosa by voting not to accept the Phala Phala investigative report. Ramaphosa is re-elected as president by a larger margin and at least 5 of the top 7 ANC positions are Ramaphosa supporters. The JSE ALSI ends the year at 73 048.6 points (0.9% lower year-on-year) and the yield on the 10-year bond ended 80 basis points higher at 10.185%. Both the Federal Reserve and ECB increased interest rates by 50 basis points, 25 basis points less than the previous increases. Both, however, warns a lot more tightening might be needed to bring CPI down to acceptable levels. Argentina wins the Soccer World Cup.

Multivest Economic Division

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