South Africa

PODCAST | Economic news of the week: Interest rates, inflation and the US presidency

The discussion starts off with interest rates. This week, the SA Reserve Bank’s monetary policy committee chose to keep the repo rate at a record low of 3.5%. 

Bauer says the Reserve Bank’s approach does not seem to be restrictive, adding that the country is likely to see some inflation in the coming months as many households — out of work or with reduced incomes — use borrowed funds to sustain themselves. This is likely to be compounded by a push to revise minimum wages in the manufacturing sector.

Looking to the recent inauguration of Joe Biden as the 46th US president, Bauer expects it might bode well for the local economy as trade relations soften with emerging-market countries, especially SA. 

Bauer also spends some time explaining how inequality has continued to be an issue during the pandemic, especially around education with access to electronic devices and internet connectivity out of reach for many SA pupils. While the issue of attending physical classes remains a hot-button topic in the country, those unable to participate in online learning fall behind those who can. 

Bauer talks about the economic shifts to e-commerce, online learning and remote working; the plight of commercial property — especially offices; the role of stimulus locally; and the outlook for the year. 

The discussion ends by looking at the impact of Covid-19 on the arts and culture sector, an area of research for Bauer. While other sectors, such as tourism and mining are constantly being measured on contribution to the national economic pie, establishing the same for arts and culture has been difficult, Bauer says. He emphasises the importance of the sector, explaining the work they are doing to gauge its size and impact on the economy in a credible way.

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