In upgrading SA’s credit rating S&P highlighted the tax revenue overrun, ongoing primary budget surplus, expenditure constraints, and SOEs needing less financial support. SA’s low growth was not enough to stop the upgrade. S&P maintaining SA on a positive outlook is good news.

S&P decided to upgrade SA’s credit rating from BB- to BB. In addition S&P has kept South Africa on a positive outlook. This is S&P’s first upgrade of SA’s credit rating in twenty years. Good news, but more progress is required to get back to Investment Grade

After 43 days the US gov shutdown has ended. The deal extends funding for most areas of government until 30 Jan 2026. Tax credit on affordable care act still unresolved and will expire at the end of this year. The Senate agreed to revisit the medical tax credit during Dec

US government announced that air travel will be reduced by 10% across 40 high volume markets given staff shortages, especially air traffic controllers. Reduction starts tomorrow. US government shutdown now the longest history at 36 days

US government shutdown is now the longest recorded at 35 days. Yesterday the Senate held their 14th round of voting to try and end the shutdown, but it failed to get the required 60 votes needed to effectively end the filibuster and reopen the government.

During the two months from Aug to Sep 2025 foreigners investors bought a total of $4.45 billion of SA government bonds, the largest two months of foreign purchases since at least 1994.

US Federal Reserve cut interest rates by 25bps as expected. The Fed also announced that they will conclude the reduction of their securities holding on 1 December. In terms of economic performance, the Fed said that the US economy is performing at a moderate pace

Opinion piece in Business Day claimed “SA’s private sector debt is the second or third highest globally at over 90% of GDP”. Global Debt Database for Q2 2025 reveals SA private sector debt was 104% of GDP but only the 40th highest globally. SA corporate debt is the 50th highest

After 33 months South Africa has been removed from the Grey List. Other countries that have been removed include Nigeria, Mozambique and Burkina Faso. Hopefully the decision will improve the level of confidence in South Africa

US inflation rose to 3.0% in Sep, lower than expected. Food inflation recorded only a modest increase, as well as rents and vehicle prices. Clothing prices rose sharply, which probably reflects higher tariffs, but inflation data should ensure a US interest rate cut next week

In 2007 France’s gov debt was 60% of GDP and S&P assigned them a AAA credit rating. Since then gov debt has risen to 114% of GDP. S&P has just downgraded France’s credit rating for 4th time since 2012 to the same rating as China. Only 11 countries still have a AAA credit rating

IMF revised up SA growth for 2025 by a very modest 0.1% to 1.1%, but revised down SA growth for 2026 by 0.1% to only 1.2%. Clearly the IMF is unconvinced by the effectiveness of SA’s policy reform agenda.

US government shutdown has encouraged the gold price to another record high of $3900/oz. If the price holds it means gold is up almost 50% year to date and up 46% over the past year. Impressive

US government shutdown is in place. While the payment of government debt and interest continues as well as any department involved in the protection of people and property, hundreds of thousands of government workers will stay at home as numerous functions will stop working

South African exports declined by 6.8%y/y in August 2025 which weakened SA’s trade surplus for the month. More importantly, during the first 8 months of the year SA exports to the US have declined by a substantial 18.7% which reflects a range of factors including higher tariffs

US inflation higher than expected in August rising 0.4% in the month and 2.9% over the past year. Shelter inflation up more than expected, also food, and vehicles. Some further evidence of higher tariffs, but not huge. Rate cut of 25bps still expected next week.

South African economy grew by 0.8% in the second quarter of 2025, up from only 0.1% in the first quarter. The performance was slightly better than expected and a welcome improvement. Most economic sectors made a positive contribution with exception of construction, and transport

The US added only 22 000 jobs in August while the unemployment rate rose to 4.3%. Wage growth stable at 3.7%. Overall the US labour market has clearly softened in recent months, which secures a rate cut of 25bps on 17 Sep but the tariff policy is hurting the US economy

After Powell’s speech today the chances of a 25bps US rate cut on 17 Sep have risen from around 72% to almost 90%. This was the clear bias highlighted in Powell’s speech.

Fed Chair Powell’s speech at Jackson Hole conference today makes it clear that the risks to inflation are to the upset while the risks to employment are to the downside, creating a policy challenge. Since US rates are still restrictive, the Fed’s bias is for a rate cut on 17 Sep.