ECONOMIC AND MARKET OVERVIEW

The G20 summit in Johannesburg during November placed Africa at the centre of global economic dialogue, despite being snubbed by President Trump.
Leaders focused on inclusive growth, climate resilience, and reform of multilateral institutions, with South Africa championing debt relief for developing economies and greater representation in global governance. The summit produced commitments to expand renewable energy financing and strengthen supply chains for critical minerals, while also highlighting divisions between advanced and emerging economies on trade and fiscal policy.

Chancellor Rachel Reeves presented the UK’s Autumn Budget, balancing fiscal consolidation with targeted growth measures.
Modest tax increases on high earners were paired with incentives for green investment and additional NHS funding. Markets welcomed the budget’s credibility, with gilt yields stabilising after months of volatility. Concerns remain about productivity growth and the impact of tighter immigration policies on labour supply, but the budget reinforced fiscal discipline, while cautiously supporting demand.

The United States narrowly avoided breaching the debt ceiling in late November after weeks of political brinkmanship. A short-term extension was passed, calming markets, although Treasury yields spiked temporarily amid investor unease. Rating agencies warned that repeated standoffs could undermine confidence in US debt as the global safe asset. The episode underscored structural risks in US governance and fiscal sustainability.

In November Japan reported stronger-than-expected Q3 GDP growth, driven by exports and corporate investment, while South Korea unveiled a semiconductor innovation package to maintain global competitiveness. Regional trade flows showed signs of recovery, despite geopolitical tensions in the South China Sea continuing to be a drag on sentiment.

Diplomatic momentum gathered in November around a potential peace framework for Ukraine. Mediated by Turkey, and supported by the EU, the plan proposed phased territorial negotiations, security guarantees, and reconstruction funding tied to compliance. While both Kyiv and Moscow expressed cautious interest, significant hurdles remain—particularly around sovereignty and NATO alignment. Markets responded with guarded optimism, as energy prices eased slightly on hopes of reduced conflict driven supply risks.

The World Bank approved a USD 925 million (nearly R16 billion) loan for SA to support a six-year program to revive its major cities, including water and electricity supply improvement, as well as waste collection. The loan will help reward cities that meet operational and financial performance targets for urban services with additional funding and will cover eight cities, including Johannesburg and Cape Town, that generate 85% of SA’s economic output and are home to more than a third of its 63 million people.

South Africa’s Minister of Finance, Enoch Godongwana, tabled the Medium Term Budget Policy Statement (MTBPS). As anticipated, both the SARB governor and the finance minister announced that the official inflation target will now be set at 3%, changing from the previous target range of 3% to 6%. In addition to this positive sentiment, the SARB Monetary Policy Committee (MPC) unanimously voted to reduce the interest rate by another 25 basis points, with the market anticipating at least two more rate cuts during 2026.