WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2008-04-19 Time: 00:00:00 Posted By: Jan
By Terri-Liza Fortein
South Africans are being advised to keep their belts well tightened until the second half of 2009 – that’s when economists expect inflation, interest rates and household debt to decrease and a more pleasant economic climate to take over.
In other words, 2010 should be a year that can be celebrated for reasons other than hosting the football World Cup in South Africa.
Last week the Reserve Bank increased the repo rate by 50 basis points – pushing the bank lending rate to a near five-year high of 11.5 percent – and banks followed by increasing the prime interest rate to 15 percent. There are also indications that further rate hikes are on the cards later in the year.
| ‘The tide will change’ |
It is even likely that the country could find itself in recession, according to Citadel economist Dave Mohr – a scenario that finance minister Trevor Manuel has vehemently claimed will not happen.
Mohr argues that the economy has clearly been slowing since the middle of 2007, “with car sales declining and retail sales growth stalled”.
“An analysis of the current state of the SA economy suggests that the local economy is vulnerable to a recession,” said Mohr.
“Several of the typical causes of a recession are currently prevailing or could easily appear. We thus believe that the probability of a local recession currently exceeds 50 percent.”
A recession describes an economy that is slowing down or is characterised by weakness in at least one major sector or a significant decline in overall economic activity that lasts for several months.
Mohr added that the global economy was in the grip of a slowdown, led by the US economy. “Elsewhere in the developed world growth rates are turning down as well and, in a globalised world economy, emerging markets are unlikely to escape the effects of this slowdown.”
Mohr does, however, believe that relief will come in 2009 or 2010 as households gradually cut down on spending and inflation is reduced.
Cees Bruggemans, chief economist at FNB, said a recession was not likely in South Africa. “Our economy is still growing and while some sectors are feeling the pinch others are doing well.
“The slow-down in sectors like real estate and household appliances and furniture retail should not be confused with a recession as there are still other sectors like mining and agriculture which are much better off,” he said.
The fact that interest rates have been increased nine times since June 2006 meant that, at some point, they have to come back down. “The tide will change and consumers could even see light at the end of the tunnel within the next 12 months or so.”
Although Cadiz African Harvest Assent Management’s chief economist, Adenaan Hardien, agrees that some sectors of the economy are experiencing a sharp decline, he has also ruled out an overall recession. “We will see a sharp slow-down yes, but an overall recession is not likely.”
He did, however, concede that things were bleak on the interest rate front and in a number of other areas, including employment opportunities and food and oil prices. He said consumers should continue tightening their belts and then enjoy the relief that will come towards the end of 2009.
“South Africans can look forward to a little bit of an economic boom associated with hosting the 2010 World Cup and the happier economic climate that will come with it,” Hardien said.