A lower oil price is likely to spell some lasting relief for South African consumers.
However, a top economist says this is likely to be the only silver lining for the economy for most of 2019.
“The falling international oil prices, fortunately for South Africans, has been so steep that it far outweighs the impact of the weakening rand. Motorists can look forward to a dramatic reduction in the price of fuel in January, and we hope that that can be sustained for the next few months of 2019,” says Econometrix chief economist Azar Jammine.
Jammine has flagged trade union activity, uncertainty in the run-up to elections and the possibility of a drought as three of the key issues South Africa will face in 2019.
But there are also global factors that will challenge South Africa in 2019.
Jammine says one of those is the tightening up of global liquidity because of moves in the United States.
“That withdrawal of liquidity is leading to anxiety that a lot of the money that has been flowing into financial markets might now start flowing out of financial markets, and that would have a ramification on everyone. One of the effects on South Africa is the weakened rand.”