Globally, there continues to be much disruption: China is battling to maintain growth in the face of the Trade War; Germany has been flirting with recession for years now; Hong Kong is in turmoil; and South Africa is just attempting to stay afloat. As a result of this, Moody’s has adjusted its global economic outlook negatively, a warning that all this uncertainty is hindering global growth.
Global News
- Rating agency Moody’s has issued a debt downgrade warning to the entire world on fears that political turmoil from the UK to Hong Kong poses a threat to the global economy. It cut its global sovereign outlook to “negative” from “stable” for 2020, cautioning that “disruptive and unpredictable” politics was worsening the slowdown in growth.
- Jack Ma, the co-founder and former chairman of Alibaba Group Holding Ltd, has chimed in on the Trade War debacle, warning that, if China and the US, are not careful the “turbulence” between the two countries could last twenty years.
- In other news, markets bounced when Larry Kudlow announced that phase one of the trade deal between China and the US had made significant process.
- US Fed Chairman Jerome Powell stuck to his plan to keep interest rates static for now, while signalling that the central bank may be ready to resume cutting should the US growth outlook falter.
- Hong Kong’s violent protests have spread citywide, anti-government protestors paralysed parts of the Asian financial hub, with some transport links, schools, and many businesses closing after an escalation of violence.
- Nancy Pelosi has said that President Trump admitted to bribery. “The bribe is to grant or withhold military assistance in return for a public statement of a fake investigation into the elections. That’s bribery,” Pelosi said at a news conference. “What the president has admitted to and says it’s perfect, I say it’s perfectly wrong. It’s bribery.”
Local News
- Eskom is still functioning without an acting CEO; the process of appointing a new CEO has been continually stalled. It has been said that this is evidence of how politically fraught the process has been.
- SAA staff have started striking over management announcing plans to restructure the SOE, which includes reducing the employee headcount by 20%. In response to this announcement, and in addition to unsuccessful wage negotiations, SAA staff have decided to strike.
- The Minister of Public Enterprises, Pravin Gordhan, did not mince his words in his reply. He said, at a conference in New York, that the government was ready to make “tough decisions” and that SAA was “not too big to fail”. Hinting that should the SOE become a greater state liability, the government may choose to shut the airline down rather than restructure it.
- Passenger Rail Agency of South Africa (Prasa) is likely to lose 10 000 jobs this year with 3 000 security guards recently being dismissed and with October salaries left unpaid.
- Although drought in the Western Cape has eased considerably, this is not the case for the Eastern Cape. Warnings have been issued over South Africa’s future food security as the late rains have threatened the grain-planting season in the province.
