Times Of Swaziland: NEDBANK OPTIMISTIC ABOUT POTENTIAL BENEFITS OF GNU

NEDBANK OPTIMISTIC ABOUT POTENTIAL BENEFITS OF GNU
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Nhlanganiso Mkhonta on 08/08/2024 07:50:00


MBABANE - “We remain cautiously optimistic around the potential benefits
associated with SA’s government of national unity.’’
This was stated by the Nedbank Group Chief Executive (CE) Jason Quinn when
delivering the bank’s half year financial results on Tuesday. He also
mentioned that they expect better macroeconomic conditions in the second half of
2024, and into the medium-to-long term.
Quinn said, while trading conditions improved noticeably as some of the most
pressing structural constraints on the economy eased as a result of stabilised
electricity supply, progress in resolving some of the other infrastructure
constraints remained limited. The CE further highlighted that global growth was
expected to improve modestly, during the remainder of this year, before gaining
slightly stronger momentum throughout 2025.
He noted that the International Monetary Fund (IMF) forecasts world growth at a
steady 3.2 per cent for 2024, strengthening marginally to 3.3 per cent in 2025.
Improvements
He said most advanced and developing countries are likely to accelerate interest
rate reductions throughout 2025 as inflation returns to targeted levels. He
added that inflationary pressures for SA are forecast to ease further, ending
2024 at 4.4 per cent and averaging 4.9 per cent for the entire 2024.  He said
the Nedbank Group Economic Unit expects monetary policy easing to begin in
September 2024, with a cumulative 50 basis points (bps) reduction in interest
rates in the second half of the year, taking the prime lending rate down to
11.25 per cent by the end of 2024, followed by cuts of a further 75 bps in 2025.
Nedbank expects SA’s economy to fare better in the second half of 2024 and
throughout 2025 if the recent improvements in electricity supply and confidence
are sustained.  Quinn added that exporters should benefit from more reliable
energy supply, firmer global growth and the anticipated upturn in commodity
prices as the US interest rates decline and the US Dollar softens. “Consumer
spending will also recover as inflation falls further, real household incomes
return to growth and debt service costs decline on lower interest rates,” he
said. It is also worth noting that the Nedbank Group delivered a relatively
strong financial performance for the six months to June 30, 2024, amid a
challenging operating environment as headline earnings (HE) increased by 8 per
cent year-on-year (yoy) to E7.9 billion, and return on equity (ROE) increased to
15 per cent.