The Global Impact of Tariff Wars on Emerging Markets

With South Africa’s GDP growth at just 0.6% in 2024, what will it take to push the economy forward? In this discussion, we speak to Reza Hendricks, Portfolio Manager at PPS Investments, about the key economic challenges and opportunities shaping South Africa’s financial landscape.

Reza explains how businesses have adapted to load shedding, why logistics inefficiencies and infrastructure constraints are still major roadblocks to growth, and how government efficiency plays a critical role in unlocking economic potential. He also provides an expert take on how U.S. tariff wars and global trade tensions could impact emerging markets like South Africa.

Despite these challenges, PPS Investments sees opportunities in local equities, remaining cautiously optimistic while keeping an eye on global uncertainties. Reza discusses how they are strategically balancing South African and global investments, their tactical approach to bonds, and why a diversified investment strategy is essential in today’s unpredictable environment.

If you’re an investor, broker, or finance professional looking for an in-depth analysis of South Africa’s investment landscape, this episode is a must-listen. Tune in to hear expert perspectives on where the economy is headed, what risks to watch out for, and where the best opportunities lie.

Key points

• South Africa’s GDP growth of 0.6% in 2024 was lower than expected, lagging behind other emerging and developed markets.

• Load shedding’s impact on the economy may be less than anticipated, as businesses have adapted with alternative power solutions.

• Key drivers for economic growth include improved energy reliability, logistics infrastructure, and government efficiency.

• Global risks, such as U.S. tariff wars, create uncertainty, though South Africa’s direct exposure remains limited.

• PPS Investments remains cautiously optimistic about local equities, seeing potential for economic improvement.

• South Africa’s financial markets are driven by both local and global factors, making a diversified investment strategy essential.

• The bond market presents challenges due to fiscal concerns, leading PPS Investments to take a tactical underweight position.

• Trump’s tariff strategy may persist as a bargaining tool, potentially prolonging global trade uncertainty.

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