R/€ = 14.17
R/$ = 10.69
Au 1281.11 $/oz
Pt 1422.00 $/oz
Jan 31, 2007
Gauteng economy feeling pressure from higher rates, inflationBack
Standard Bank|Goolam Ballim|Infrastructure|Mike Schssler|Mike Sch�ssler
© Reuse this The Gauteng economic environment faces its toughest economic challenge since 2003, with higher interest rates and inflation placing great pressure on businesses, the Gauteng Business Barometer (GBB) for December indicates.
The GBB is a measure of economic growth and the business mood in the province and was developed through a partnership between the Gauteng Business newspaper, Standard Bank and economist Mike Sch�ssler.
The index for December slipped by 6,2%, from 154 to 145 index points, compared with its performance in November, Standard Bank said on Wednesday.
The index was also 4,8% lower than in December 2005, when it stood at 152 index points.
Sch�ssler said that the GBB for December clearly showed that it had become difficult to do business in the province. The economic stress index, a subindex of the GBB that measures negative economic factors, was at its highest level since 2003.
“It is driven up by higher inflation and interest rates, as well as an increase in civil debt judgements and a downswing in the creation of new jobs,” he noted.
Sch�ssler added that, although he expected more interest rate increases of between 25 and 50 basis points over the next few months, the negative impact on the economy could be at its peak.
Standard Bank chief economist Goolam Ballim added that, even though the GBB had slipped in December, he expected continued economic growth in Gauteng for 2007.
“The effects of higher inflation and a slowdown in the growth of property values on consumer spending is becoming more evident. Investment in infrastructure and the weaker rand will benefit the supply side of the economy and the growth drivers of the economy will therefore shift from consumers to producers.”
Ballim was confident that businesses would continue to cope with a volatile currency, which was at the mercy of domestic and international events.
He predicted that the rand would trade around R7,35 and R9,53 against the dollar and euro respectively, in 2007.”
He expected a stable year for interest rates, which could even start to decline at the end of the year.
Both Ballim and Sch�ssler agreed that 2007 would be a positive year for Gauteng’s economy, although the economic growth rate would be slower than achieved in the past few years.
Edited by: Nelendhre Moodley© Reuse this Comment Guidelines (150 word limit)
Other Trade News
Article contains comments
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
The multibillion-rand development of the Zendai Modderfontein New City, east of Johannesburg, will aim to exemplify an integrated city node, says property group Zendai South Africa COO Wenhui Du. The development will focus on the Modderfontein Gautrain station to be...
The South African Civil Aviation Authority (CAA) hopes to have finalised regulations for the flying of Unmanned Air Vehicles (UAVs) – also designated Remotely Piloted Air Systems (RPAS) and popularly called drones – in the country’s civilian airspace by the end...
Various stakeholders have expressed optimism that the Small Business Development Ministry, created after the national elections in May, will add much needed impetus to enterprise development in South Africa, where a strengthening of the entrepreneurial culture is...
Capturing and storing carbon dioxide (CO2) is the only way through which the world will achieve the lowest of the United Nations Framework Convention on Climate Change’s (UNFCCC) global warming predictions, called the representative concentration pathway (RCP) 2.6....
The City of Johannesburg has recovered R107-million following the arrest of 22 people allegedly involved in corruption, collusion, fraud and tampering with the city’s electricity systems, which had ultimately cost the city R200-million in lost revenue.