Economist sees silver lining for SA amid US tariffs
As the world continues to grapple with US import tariffs, a local economist believes there is a silver lining for South Africa.
"Everyone is now getting really scared that the world is going to go into a sharp downturn, that companies will go bankrupt, and that many people are going to be laid off around the world,” Econometrix chief economist Azar Jammine said on Monday.
"On the other side, fuel prices have fallen dramatically from $70 to $65 a barrel, and the extent of the decline in oil prices has been so great that it will more than neutralise the effects of the fall in the rand, and we can look forward to further declines in fuel prices in May.”
Crude oil prices have dropped by 3%, falling below $60 a barrel to their lowest levels since the pandemic.
READ: Market panic deepens as China retaliates against US tariffs
The impact of sweeping tariffs imposed by President Donald Trump has sent global markets into a tailspin.
European stock markets plummeted in early morning trade - with Frankfurt slumping as much as 10%. Hong Kong's loss of 13% is its worst in nearly three decades. Chief Economist at Econometrics Jammine says fears of a global economic crisis are growing.
Jammine believes the situation might benefit South Africa.
"There is a global fear of major economic downturn, which is encouraging expectations that central banks around the world will have no option but to reduce interest rates quite sharply this year. And that has now increased the likelihood of further cuts in the repo rate and in the prime in South Africa.”
Trump had this to say when reporters asked about the market decline.
"I don't want anything to go down, but sometimes you have to take medicine to fix something."
