The South African economy displayed lacklustre performance in 2023 as higher interest rates hampered growth. The interest rate hikes were meant to reduce high inflation prevailing after the Covid pandemic to an acceptable level. This objective was largely achieved by 2023.
Principal Investment Consultant Marcus Rautenbach notes that financial markets produced pleasing results for the year. After a solid start, difficult conditions prevailed from July to October, but thanks to a strong rally in November and December 2023, markets closed the year in the black.
He further highlights that retirement funds’ investment results are looking better now. Longer-term investment returns currently exceed the required rate of return used by many in the industry (an after-fees investment return of 5.5% above the long-term inflation rate).