South Africans had to endure a dismal 2016.

A drought, a ballooning budget deficit and a government perceived to be at war with itself contributed to a particularly gloomy year. Economic growth was nominal at best, and business confidence fell to an all-time low.

So what’s coming in 2017, and dare we be a little optimistic?

Tentative economic rebound

Usher in 2017, and the predictions for the South African economy are slightly more positive. A rise in commodity prices, coupled with the tailing off of the El Niño effect, is expected to drive a tentative rebound in economic growth.

Food price inflation is tipped to normalise after rising by an unprecedented 11% in the fourth quarter of 2016. An improved outlook for manufacturing is also on the cards.

Anticipated economic growth of 0.8% to 1.1%

According to a recent Reuters’ poll, the general consensus is the economy will expand by 1.1% in 2017, up from the meagre 0.4% growth attributed to last year. The second part of the year is when things should start improving.

The International Monetary Fund (IMF) is not as optimistic. It predicts the South African economy will grow by just 0.8%. It quoted rising unemployment, policy incoherence and political uncertainty as risks threatening economic growth.

Measures to boost growth

The IMF has, however, pinpointed several measures that can boost growth. Well-run and profitable state-owned enterprises, greater public/private participation, more inclusive labour market policies and improved education and training are all reachable goals that could help fire up the South African economy.

Red flags

Despite some upbeat predictions, several “red flag” situations could tip the economy into recession.

A ratings downgrade, decrease in capital spending and populist political rhetoric could all scupper South Africa’s chances of a sustained economic turnaround.

How the economic outlook can affect ordinary South Africans

Due to the stabilisation of food prices, there’ll be a slight dip in inflation at the start of the year. But don’t expect prices to continue dropping.

In fact, you’ll probably have to pay more for just about everything in the third and fourth quarters, as inflation is tipped to rebound to around 6%.

Interest rates

There’s no sign of an interest rate cut in the near future. You’ll have to pay the same amount of interest on your home loan, credit card or retail debt.

Should the rand depreciate in value, there could well be a rate hike on the horizon. It’s probably a wise idea to plan for an increase in your total monthly debt repayments.

Cabinet reshuffle

Last but not least, there’s every chance of a cabinet reshuffle. South Africa may well have a new finance minister in the not too distant future. If this happens, hold onto your hat. The rand will tumble in value, and the JSE may flatline for some time to come.

Use your assets to your advantage

Slow economic growth, rising inflation and the possibility of an interest rate hike mean we’ll all be a little poorer in 2017.

If you need funds fast, consider taking a short-term loan against the value of your car or another valuable asset, such as a speedboat, luxury wristwatch or jewellery, or artwork.

If you’re looking for a fast, discreet loan with no credit checks, consider an asset-based loan from Lamna. We offer short-term loans against the value of various assets, including motor vehicles, fine art and jewellery.