A crisis forces us get working on finding solutions – Schüssler

Northcliff Investor’s Club hosted a breakfast at Benvenuto on 4 February where they had esteemed economist Mike Schüssler talk about the state of South Africa’s economy.

Schüssler eased into his talk with a joke that pointed out how the news seems to get worse by the year. In his talk he mentioned the many facets that would contribute to the success or demise of a country’s economy. He went on to mention how emerging markets are developing faster than those who are already developed. He highlighted India as being one of the fastest growing economies and that countries like Brazil and Russia are faced with their worst decline.

When informing the guests about the country’s economy, he had both positives and negatives to state. He divulged that the economy will likely get downgraded to junk status and that there will be very little growth in the year. With the inflation set to be very high, he said that the economy will decline by at least 1.4 per cent. With all of these dramatic negatives he did mention some positives. Schüssler said mention that South Africa has the eighth highest pension fund in the world. We also have very high home ownership and we should not forget how well we have done in some instances.

“Our [Gross Domestic Product] GDP per capita has a relatively slow wealth increase,” said Schüssler.

He explained that the GDP per capita is not the highest by far as we are paying off debt. Schüssler stated that the rand is the fifth worst emerging market.

After his talk, the floor was opened up to guests who had questions for the knowledgeable economist. One of the questions asked was where would he invest. He answered the questioned by stating that he dips more into fixed assets and less in bonds.

Details: Northcliff Investor’s Club t.ferreira@psg.co.za or 011 550 5900

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