On Sunday, Deputy President Cyril Ramaphosa presented the findings of the National Minimum Wage (NMW) report at the National Economic Development and Labour Council (Nedlac) office in Johannesburg. The report proposes a national minimum wage of R3 500 per month (R20 per hour) to be phased in over the next two to three years. The report recommends that wages in the domestic work sector should be set at 75% of the minimum wage level and at 90% in the agricultural sector, while some businesses could also apply for exceptions. In addition, Ramaphosa highlighted the progress made with strike balloting, which could help to “prevent long strikes from having a negative impact on the economy, on workers and businesses”. The NMW recommendations still need to be affirmed by legislation, but given that the proposed level is at the lower end of the scale that was talked about, they are likely to be positively received by credit ratings agencies.
On the domestic data front, disappointing retail and wholesale trade figures supported earlier expectations that economic growth will slow significantly in Q3 compared to Q2. The trade figures, as well as our estimate for Q3 GDP growth, are discussed in the domestic section.
In the international section, we unpack recent US data and European GDP figures. The US data firmed our view, as well as the general market expectation, that a US interest rate hike is on the cards for December. This fuelled broad-based dollar strength, which contributed to the weakening of the rand exchange rate – see markets....Get it here