The Power of Positivity: How Sentiment Drives Our Economy, by Jonathan Broekman

A few weeks ago, an economist friend shared a simple yet profound truth with me: the economy isn't just driven by data; it's driven by sentiment. That conversation has stayed with me because it's an important reminder: our perceptions influence our decisions!

Many South Africans are asking the same question: "Is the economy really improving, or are we still in for more doom and gloom?" The answer might not lie entirely in the data but rather in how we choose to see the opportunities before us.

Post Election Positive Outcomes:

Interest Rates
Interest rates have just come down, offering a bit of relief for homeowners and anyone with debt. Lower interest rates mean that now could be a perfect time to consider property investments or upgrades you've been holding off on.

Petrol Prices
Another silver lining is that petrol prices have also decreased, which makes a noticeable difference in our everyday costs. While fuel prices can be unpredictable, any reduction in these costs offers some much-needed breathing room for everyone.

USA Interest Rate & Strengthening Rand
Recently, the US Federal Reserve cut its benchmark interest rate by 50 basis points, lowering the federal funds rate to a target range of 4.75% to 5%. This marked the first rate reduction since 2020 and was a larger-than-expected move to support economic growth amid global uncertainties​. Read More: Trading Economics. On the back of the anticipated interest rate drop in South Africa, the South African Rand strengthened against the US dollar, reflecting improved investor sentiment and a positive outlook for the local economy.

Government of National Unity
While it's still early days, many are optimistic about how this cooperative governance approach to the GNU could contribute to greater economic and societal stability and progress.

No Loadshedding: Long May It Last
Finally, and this may be the most welcome news of all, is the fact that we've enjoyed an extended period (more than 170 days) without loadshedding! 
It's been a refreshing break from the unpredictability we've come to expect over the years. Let's hope this continues, as a stable power supply boosts business confidence and brings a sense of normalcy and welcome predictability to our daily lives.

But here's where sentiment matters. The numbers and the facts can show improvement, but how we feel and respond to these positive developments, plays an equally crucial role. If we embrace the positives, stay hopeful, and make intelligent, informed decisions, we can help push the economy toward real, sustainable growth. 

With less than 100 days left in this year, I want to challenge you to take a more positive approach to your day-to-day and dinner conversations. Focus on discussing the positive changes happening both in our country and around you. Emphasise progress and optimism in your interactions. 

I would welcome your comments, and feedback on any outcomes following your positive approach.

Warm regards,  
Jonathan Broekman 
Homes of Distinction