Property
A sluggish recovery: Will more rate cuts revitalise the housing market?
The FNB House Price Index (HPI) remained stable at 1.4% y/y in February, unchanged from the revised January figure (previously 1.2%). While growth remains modest, this represents the strongest performance since 1H23.
31 March 2025
Flash Notes
Consumer inflation remains unchanged in February
Headline inflation was 3.2% y/y in February, unchanged from January's figure. The print was slightly below ours and the market expectation of 3.3% and 3.4%, respectively. Monthly pressure was 0.9%, led by contributions from core inflation.
19 March 2025
Economics Weekly
Let's talk about the Laffer curve
The 2025 Budget Speech has been postponed to March as contentions within the Government of National Unity (GNU) regarding tax proposals fester. The most pressing issue with the tax proposals appears to be with the purported VAT increase of 200 basis points (bps). While VAT tends to be regressive, because lower-income households tend to have a higher marginal propensity to consume, this has been negated in South Africa (SA) through the zero-rating of basic goods. In line with this, the proposed VAT increase would have been coupled with a broadening of the list of goods that do not carry a VAT burden. That said, other indirect taxes, excise taxes for example, are still regressive. Given that Treasury will still attempt to avoid a budget that shifts away from a consolidation path, tax policy will remain top of mind in the coming weeks. Without pre-empting the final proposals that will be tabled in March, we instead cast a reminder of the limitations of tax increases in raising government revenue which has been conceptualised through the Laffer curve.
28 February 2025
Economics Weekly
2025 Budget preview: Balancing fiscal consolidation and growth priorities
On 19 February 2025, Finance Minister Enoch Godongwana will present the 2025 Budget-his first Budget Review since the formation of the Government of National Unity (GNU). His October 2024 mini-budget highlighted fiscal challenges while maintaining a consolidation strategy, which we expect to continue, though with risks and challenges.
14 February 2025
Property
FNB HPI: A slow, but steady grind
The latest FNB House Price Index (HPI) averaged 0.9% in December, slightly lower than 1.0% in November (revised from 0.8% y/y). This takes the annual average house price growth to 0.8%, lower than the 1.5% in 2023, but in line with our forecast.
29 January 2025
Disclaimer
This Publication note is issued by FNB for the information of clients only and should not be produced in whole or part without prior permission. Although FNB is an Authorised Financial Services Provider, any opinions and/or analysis contained in this Publication are for informational purposes only and should not be considered advice, including but not limited to financial, legal or tax advice, or a recommendation to invest in any security or to adopt any investment strategy. The information contained herein has been obtained from sources/persons which we believe to be reliable but is not guaranteed for correctness, completeness or otherwise and we do not assume liability for loss arising from errors in the information or that may be suffered from using or relying on the information contained herein irrespective of whether there has been any negligence by us, our affiliates or any other employees of us, and whether such losses be direct or consequential. As market and economic conditions are subject to rapid change, any comments, opinions and analysis is rendered as of the date of publishing and may change without notice. Such changes may have a material impact on the outcome of any investment. Securities involve a degree of risk and are volatile instruments. Past performance is not indicative of future performances. Securities or financial instruments mentioned in the Publication note may not be suitable for all investors and FNB bares no responsibility whatsoever arising from or as a consequence hereof. The material is not intended as a complete analysis of every material fact regarding any share, instrument, sector, region, market, country, investment or strategy. The recipient of this Publication must make their own investment decision and is advised to contact his relationship manager for a personal financial analysis prior to making any investment decisions. Copyright 2023.
