Rather, it appears that the recent rapid increase in corporate profits was an unexpected windfall for firms. If that is the case, the savings are likely to be used for business fixed investment and wage increases with some time lag.
Let me focus briefly on the global economy and South Africa’s response. This is an unusually challenging time for the global macroeconomy. High inflation has now taken centre stage in the global debate on monetary policy, as prices continue to climb at rates last seen decades ago.3 We have seen major central banks raising interest rates at the fastest pace in a generation.