http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.69Change: -0.08
R/$ = 12.52Change: -0.14
Au 1153.30 $/ozChange: -18.59
Pt 1037.70 $/ozChange: -23.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Nov 02, 2007

SA will hit 'magical' 6% growth by 2010 – analyst

Back
FNB property analyst John Loos on the likelihood of more interest rate hikes (02/11/2007)
 
 
 
Africa|Sustainable|Africa
Africa|Sustainable|Africa
africa-company|sustainable|africa
© Reuse this The spate of interest rate hikes over the past several months could have peaked, offering South African consumers something of a breather, while the country is on its way to reaching "that magical mark" of 6% economic growth in 2010, an economist said on Friday.

Further good news was that inflation could begin to slow, as current levels were not sustainable, FNB property economist John Loos said.

"There are signs that the global food price inflation will drop," he told a Johannesburg conference. "We have seen a decline in the past couple of months."

"That's big, because about 26% of our consumer price inflation index (CPIX) basket is food," Loos highlighted.

He said that there could still be some more upward movement in the CPIX, but that its peak was not far off.

"The Reserve Bank have finished with their interest rate hiking," Loos put forward. "By December's meeting, they will probably have decided that they have done enough, and will hold interest rates where they are for a while."

This would be comforting news to the big-spending South Africans who had been slapped with three successive rate hikes this year, in Reserve Bank governor Tito Mboweni's determined efforts to curb inflation, and encourage saving.

However, the Reserve Bank had sprung surprises on the public before, and could do so again.

Dollar due to head further down

The dollar, which has taken a big knock since the subprime mortgage crisis swept the US, has still got its eyes to the ground, which bodes well for a stronger rand, Loos stated.

"The dollar had a few years of weakness ahead," he said. Traditionally, there was an inverse correlation between the strength of the US dollar and the rand.

The US had a current account deficit of some 6% of its growth domestic product, which had far deeper implications than South Africa's current account deficit, owing to the sheer size of the US economy, said Loos.

"The dollar's weakening cycle is far from complete, it has got some way to go."

"We've got some good times ahead for the rand's strength," he commented.

Current account deficit no danger yet

South Africa's current account deficit is not a big danger yet, but it will become a problem in a couple of years time if it continues, Loos went on to say.

Finance Minister Trevor Manuel did not express much concern about the country's yawning trade gap when he presented his medium-term budget speech to Parliament on Tuesday.

Economic growth

Loos was sanguine on South Africa's growth prospects, predicting that economic expansion could reach 6,1% in 2010, which was in line with government targets.

"I believe we are going to head for 6% economic growth," he said, adding that growth would average at 4,6% this year.

He pegged growth at 4,9% in 2008, and climbing to 5,5% in the following year.

It would be in 2010 that he believed South Africa would reach "that magical" mark of 6,1% economic growth, added Loos.

"Sustaining that for 10 or 20 years is another thing, though," he said.

Loos said that one shouldn't overemphasise the influence of politics on economic performance. The ruling African National Congress was gearing up for the election of its new leader at the end of the year, which had caused uncertainty over the effect that a change of leadership could have on economic policies.

Potential candidates for the position included incumbent Thabo Mbeki, Jacob Zuma, Tokyo Sexwale and Cyril Ramaphosa.


Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Trade News
Updated 22 minutes ago The South African market has been included as one of Spain’s 16 “priority markets” as the European country intensifies its efforts to raise exports in the wake of the global economic crisis and as its companies move to diversify their foreign direct investments to...
Financial services provider Investec has acquired the remaining 51.5% stake it did not already own in import and trade financing solutions provider Blue Strata group. The buyout became unconditional on June 19.
International investors, dismayed by Nigeria's decision to delay a naira devaluation they see as long overdue, will hold back from its stock and bond markets, raising risks of a deeper crisis in Africa's biggest economy. The afterglow from March, when an incumbent...
More
 
 
Latest News
Updated 32 minutes ago The South African market has been included as one of Spain’s 16 “priority markets” as the European country intensifies its efforts to raise exports in the wake of the global economic crisis and as its companies move to diversify their foreign direct investments to...
Updated 40 minutes ago Advisors to Nigerian President Muhammadu Buhari have recommended a root and branch overhaul of Africa's biggest oil industry and increased borrowing to help pay off $20-billion of government arrears, a reform proposal document shows. Buhari, who won a shock election...
Finance Minister Nhlanhla Nene
Updated 56 minutes ago Following its submission to Finance Minister Nhlanhla Nene in December, the Davis Tax Committee (DTC) on Tuesday publicly released its first interim report on value-added tax (VAT) for public comment. Interested parties had until September 30 to comment on the report...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
NHLANHLA NENE The main constraints to economic growth are domestic
Finance Minister Nhlanhla Nene earlier this month stated that, while South Africa’s 2015 economic growth target of 2% was achievable, it was not enough to deliver the tax revenue needed to combat the country’s challenges.
The World Steel Association has published the 2015 edition of the World Steel in Figures report, which shows an increase in steel production as well as provides an overview of steel industry activities from crude steel production to apparent steel use.
The 25-year master plan for Gauteng’s Aerotropolis project will go through a process of approval and adoption during June and July, says Aerotroplis project manager Jack van der Merwe. “We are also in the process of putting together a special purpose vehicle (SPV) to...
SOLAR PANELS The existing buildings in the Coega Industrial Development Zone lent themselves well to rooftop solar panel installations
The Coega Development Corporation (CDC) plans to fit 15 of its buildings, totalling 127 000 m2 of roof space, in the Coega Industrial Development Zone (IDZ), in the Eastern Cape, with solar panels.
The Supreme Court of Appeal’s (SCA’s) November 2014 judgment, ordering steel producer ArcelorMittal South Africa (AMSA) to hand over the 2003 Environmental Master Plan for its Vanderbijlpark steel plant to environmental pressure groups, confirmed the right of civil...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96