2023 The year ahead
It is always exciting to welcome a new year as we look ahead to the challenges and opportunities that another 12 month cycle brings.
2022 was a year that put Inospace to the test. Some years bring drama, others determination. Last year brought growth. From the acquisition of Inofort's new property assets, restructuring our regionalised reporting model, to the Inocircle, and to the many new building projects - 2022 was a year of growth.
For the rest of the world, it was a chaotic year. 2022 was supposed to be the comeback year for the world economy following the Covid pandemic.
2022 was the most disruptive year of the new millennium
Instead, 2022 was marked by a new war, record inflation and an unprecedented energy and electricity crisis. In 2022, as most countries emerged from lockdowns and other restrictions,
central bankers insisted that high inflation would only be temporary as economies returned to normal. But Russia's invasion of Ukraine, in late February, sent energy and food prices soaring.
Central banks played catch-up. They started to raise interest rates to tame galloping inflation - at the risk of tipping countries into deep recessions, since higher borrowing costs mean slower economic activity.
Many countries are now grappling with cost-of-living crises because wages are not keeping up with inflation, forcing households to reduce their spending.
If prediction is a fool's game, there are still ways to reduce the chances of looking foolish. You would not have been far wrong in South Africa, in recent years, by forecasting record-breaking load shedding, political shenanigans and continued economic disappointment.
Even so, 2022 showed that there are always new and exciting ways for the South African government to screw things up. From police investigations into our sitting President, to a former President trying to prosecute the sitting one, and the lowest electricity supply in history — with the political death of the former President's ex-wife and the spectacle of a circus-like ANC conference in between — some of the events of the past 12 months would have seemed far-fetched even to catastrophists.
After a year like this, you would think that the South African government would find it difficult to surprise us. Think again.
South Africa own goals
The current government, which will face a general election next year, can never surprise us enough with their ability to create homemade crises.
And this year won't be different.
So what will things look like for SA this year?
SA's economy will be weak as a result of load shedding and little investment.
Eskom will not get better in 2023 after load shedding reached record levels in 2022. During the third quarter of 2022, load shedding reached an all-time high of almost 50% of the time.
An industrialised economy can only grow meaningfully or attract investors with a reliable and cheap power supply. Eskom’s problems will hasten private sector investment in renewable alternatives, from households to corporates. This is a de facto privatisation of power generation and a gradual move away from coal. But most households and many small businesses cannot afford this option and will remain at the mercy of Eskom’s disastrous slide. The best we can hope for is that load shedding will start bottoming out and slowly decreasing over the next couple of years.
But that will not happen in 2023. There will be more pressure on the power grid with the possibility of unplanned breakdowns of generation units.
South Africa’s failing state will continue to take a toll on the economy.
Transnet will probably continue to come off the rails, curbing the mining sector’s ability to export the commodities it extracts at a time when slowing global growth may take the shine off the prices of many minerals and metals.
And there are no signs that the decay of other state services, such as water provision and road maintenance, will be arrested anytime soon. This makes doing business increasingly difficult and costly.
There are some rays of light piercing the coming storm. Inflation should slow, and President Ramaphosa has more political space to pursue economic reforms after winning a second term.
More private-sector energy investment is certainly on the cards, and the agricultural sector remains buoyant.
Official growth forecasts of about 1.9% will probably be cut, if not slashed.
Brisker-than-expected economic growth in the third quarter overshot initial expectations. However, that will not be repeated in 2023.
Food inflation will continue to eat into the household budgets of poor and working class households, leaving them with less income to spend on other things.
The SA Reserve Bank is expected to maintain its hiking cycle, though slower than in 2022.
This will limit consumer expenditure while making debt burdens more onerous. Against that backdrop, prospects for significant job creation remain grim. This will further entrench already glaring wealth and income disparities and stoke social tensions.
The political environment remains fertile for unrest, which is hardly conducive to a growing a vibrant economy. So, expect the lights to dim further as 2023 advances and the economy struggles to gain traction.
A perfect storm of economic calamity is brewing, threatening to rock the tepid recovery from the pandemic and lockdowns. We can only hope for a new economic dawn to really break in 2024.
Right now, the sun is setting, and the prospects at best will be for a tepid year.
Brace yourself for a rabbit warren of challenges
As we enter this new Chinese zodiac year, it's an exciting time to reflect on the attributes and energies associated with the rabbit. The rabbit is known for its calm, gentle, and refined nature and is often associated with creativity, diplomacy, and good fortune.
These qualities will surely serve us well as we navigate the challenges and opportunities that the year ahead may bring. One of the key themes of the year of the rabbit is the importance of balance. The rabbit is skilled at finding harmony and maintaining equilibrium; this year, it will be important for us to do the same.
As we work towards our goals and strive for success, we must remember to care for ourselves and our relationships with others. Finding a healthy balance between our professional and personal lives can set us up for long-term success and happiness.
Another attribute of the rabbit is its adaptability. Adapting and pivoting will be essential to our success as we face an ever-changing world. By staying flexible and open to new ideas, we can stay ahead of the curve and seize new
opportunities as they arise.
The year of the rabbit is also a time for creativity and innovation. The rabbit is associated with artistic expression and is known for its imaginative and creative nature. As we enter this new year, it's a great time to tap into our creative energies and develop new ideas and approaches.
Whether it's us finding new, innovative solutions to problems at work or exploring external professional ideas and education, the year of the rabbit is the perfect time to let creativity shine.
The rabbit is creative and this is the year for innovation
Finally, the year of the rabbit is a time to focus on relationships and connections. The rabbit is known for its strong social bonds and ability to form lasting relationships.
And at Inospace relationships is a key core value of ours.