RECESSION LOOMS! – SA on the brink as rand crashes and markets plunge

Cape Town – The South African rand continued its sharp decline against major currencies on Monday morning, weighed down by global recession fears and escalating trade tensions between the United States and China.

The currency weakened to R19.40 per US dollar, extending losses triggered by former U.S. President Donald Trump’s tariffs. Since March 31, the rand has depreciated 6% and lost 4.75% since Trump’s April 2 trade policy announcement.

Against the euro, the rand dropped 6.4%, hitting R21.28. If this trend persists, inflationary pressures may mount — though lower international oil prices could help offset fuel price increases, IOL reported.

Markets in Turmoil

Global markets responded negatively to the ongoing trade war. The JSE All-Share Index fell 1.83% on Monday after a 5.26% drop on Friday. Worldwide, stock markets saw steep losses:

• Japan’s Nikkei fell 8%

• Hong Kong’s Hang Seng plunged 10%

• China’s Shanghai Composite lost over 4%

China retaliated by imposing 34% tariffs on U.S. goods, effective April 10, further stoking economic uncertainty. Analysts warn that collapsing global demand signals a looming recession.

South Africa Faces Recession Risks

According to Daily Investor, award-winning economist Dawie Roodt cautioned that South Africa is heading toward a recession amid global and domestic economic turmoil. The situation has worsened following Trump’s decision to impose:

• A 10% global tariff on imports

• A 30% tariff on South African goods, labeling the country a “worst offender”

• A 25% tariff on imported vehicles, threatening South Africa’s car manufacturing sector

Political Uncertainty Intensifies

Political instability has compounded economic concerns as the Government of National Unity (GNU) faces internal tensions. The ANC relied on smaller parties to pass the 2025 Budget, causing friction with the DA, potentially fracturing the coalition.

Business leaders have urged political parties to resolve their disputes, warning that a government collapse could lead to job losses and economic decline.

Financial Markets in Free Fall

The economic turmoil has led to steep losses in South Africa’s financial markets:

• The JSE All Share Index fell from 89,951 to below 79,000

• The rand weakened from R18.27 to R19.34 per US dollar

Global investors are shifting funds to U.S. capital markets, despite a weakening dollar and falling long-term interest rates.

Roodt, taken aback by the market turmoil, stressed that the global financial landscape has fundamentally changed and is unlikely to recover soon. He advised South Africans to seek practical financial guidance to weather the crisis.