South Africa is among those few countries that managed to recover after the first wave of the coronavirus pandemic and its accompanying lockdown. Even though the economy faced some serious challenges back in several months ago, the government quickly started to implement new strategies to recover and save the country from the economic crisis. As a result the trading sector of the country quickly improved and even more, confidence levels across South Africa have shown major advancement after the harsh conditions of the lockdown in April.
However, now the situation is predicted to change, and as studies show, the second wave of the pandemic may make things worse and disrupt the progress. According to the Bureau of Economic Research (BER) which usually estimates current economic trends that affect the South African business sector, during the fourth quarter of the year the SA trading sector has set a new record and climbed to new highs. But looking at the second wave of the pandemic which has already started, the predictions about the future of the SA trading sector are not really hopeful.
How will the second wave affect SA’s trade sector?
Despite the positive results of the fourth quarter of the year, now as an FX brokerage company Axiory suggests, the South African trading sector could be affected by so many unwanted factors both locally and internationally. This broker usually analyzes the current trends in the markets in order to predict possible changes and get traders ready to avoid losses. As they say, the celebration of the recovery is too early, because there are still many reasons that make the trade sector worry about the second wave which is expected to derail the progress. Considering the current success, at a first glance it may seem unbelievable that such kind of huge progress will be disrupted in such a short time, but that’s exactly what trading experts on this website suggest.
The result of the fourth quarter shows that business conditions in South Africa were very satisfying as the retailer confidence levels greatly improved over the months. In fact, the sector has seen confidence rebound during the second quarter finally after 29 years and it has gone up from 11% to 50% in the fourth quarter. The data suggest that the sales have also improved and as a result, the motor dealer has gone up from 2% to 41%. Therefore, today’s level of confidence is much better compared to the level before the crisis which means that business confidence has improved so much but the questions remain about the sustainability of these improvements and as the experts suggest, probably it won’t last for long.
Improvement of the trading sector
Despite the fact that predictions are not positive, for this moment BER results show some major improvements in the SA trading sector. Particularly, almost all trade categories enhanced after the lockdown, including confidence levels of retailer, wholesaler, and new vehicle dealer sectors. Just like this, high-low indicators are showing positive results as well, meaning that the forex trading industry of South Africa has a good performance as well.
This is why traders in this region hurry to use scalping or day trading strategies in order to increase their benefits when they still can because at the given moment they have the possibility to buy weekly laws and sell later when the prices will approach weekly highs. However, nobody knows if the current positive situation will remain, as the expectations about the future of the SA trade sector are not favorable.
Now as BER reports, the trade sector and consumer income could lose billions of dollars, as the next outbreak of Covid-19 pandemic continues to damage the whole economic sector. The virus quickly spreads in the Western and Eastern Cape and more and more people are infected every day. This is why the government seriously thinks to start the second lockdown in order to stop the virus from spreading. Considering the fact that the festive season for the trading sector is coming to start, the lockdown will be devastating and the progress is highly likely going to be lost. All this means that improvements in the trade sector confidence level may be cut short.
Updated Covid-19 response strategy
As a result of these predictions, the government tries hard to fight against the virus and avoid the damaging impact of the second wave. President Cyril Ramaphosa will finally declare soon whether South Africans face further restrictions or not. For the given moment, coronavirus cases have been rising, recording 4173 new cases on Wednesday which is about twice more compared to the previous day. The situation is especially frightening in the Eastern in Nelson Mandela Bay and in the Western Cape.
Now the government is going to declare new recommendations related to the rising number of coronavirus cases. Probably, the new restrictions could focus on curfews, as it’s considered as the only way to stop the spread of the virus for now. Specifically, the trading hours for restaurants and bars, as well as for the places that sell alcohol, will be restricted. But these reports haven’t been confirmed yet.
Although the officials have been continuously reporting that the second wave hadn’t started in the country. They said that the only thing the country was experiencing was the hotspot outbreaks. But now the situation has changed and it’s time to apply restrictions again. The main reason why the outbreak started again is the festive season. People in SA started to care less about the safety protocols, like mask-wearing and keeping physical distance, and as a result, the situation worsened. Now South Africans are going to face a new curfew and it’s completely up to them and their reasonable behavior to stop the virus from spreading which is why officials are encouraging people to stay at home to avoid being in a second-wave in January.
