Too early to tell if KZN economy will benefit from US mid-term elections – Economists
US President Donald Trump points to CNN’s Jim Acosta during a news conference in the East Room of the White House. Picture: Evan Vucci/AP
JOHANNESBURG – Economists said it was too early to say whether the KwaZulu-Natal (KZN) economy would benefit from US President Donald Trump’s weakened hand following the US mid-term elections this week.
Trump emerged a weakened leader after the Democrats won control of the US House of Representatives from his conservative Republican Party.
The defeat was interpreted as having the potential to curtail Trump’s punitive trade and tariffs agenda.
Global political volatility affects the economic wellbeing of KZN.
The province is home to the Durban Harbour, the largest and busiest shipping terminal in sub-Saharan Africa, handling 65 percent of the total containerised cargo of South Africa or 31.4 million tons of cargo each year.
Delegates attending the KwaZulu-Natal Export Week last month highlighted the need for the province to be positioned as the gateway to Africa and the world.
Efficient Group chief executive Dawie Roodt said politically the US mid-term election results were good for South Africa.
“But in terms of the economy they are bad for the country. We need a stronger American economy so that they can continue to buy stuff from us,” Roodt said.
“What you now have is Trump losing politically. The election results have made him a weaker president, which will translate into a weaker dollar and a weaker economy.”
Roodt said overall, the world economy was going to be a little bit worse off than before as a result.
Economists.co.za chief economist Mike Schussler said it was difficult to say whether the provincial economy would benefit.
“America is the largest economy in the world and in that sense it obviously means that as it grows there will be a bigger demand for our products such as coal and gold.
“This also means that more tourists will be visiting South Africa for sure. But as to how the election results will benefit KZN per se, it’s difficult to say.”
SA Institute of Race Relations chief economist Ian Cruickshanks said it was too soon to tell whether the province’s economy would benefit from a weakened Trump administration.
“It’s hard to say whether it’s going to make a significant difference. In fact, I don’t see how political imbalances in the US are going to have any positive spin-offs for the emerging markets,” said Cruickshanks.
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Source: iol.co.za
