Banks are now expecting interest rates to stay higher for longer in South Africa, and the middle class is hanging on by a thread – with little to no relief on the horizon for the next two years.
Tshabalala noted South Africa, in particular, has been hit hard due to its small but highly open economy, making it vulnerable to external shocks. As a result, Standard Bank only expects the Reserve Bank to reduce rates by 75 basis points in 2024, beginning only in September.highlighted that this is very bad news for middle-class South Africans, who have a tough two-year ride ahead of them.
Given the position middle-class households find themselves in, Berkowitz sees a grim picture and a worsening situation.Berkowitz firmly believes that “In an economy with near-zero growth, salary and wage increases will lag the inflation rate,” he said.
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