No recession for SA

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bodhi

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http://www.fin24.com/articles/default/display_article.aspx?Nav=ns&ArticleID=1518-25_2271166

Johannesburg - South Africa's economic growth was likely to slow in 2008, but the economy would not fall into recession, ratings agency Standard & Poor's (S&P) said on Thursday.

"The country is going through a difficult phase with capacity constraints and emerging and continued inflationary pressures after a period of strong growth," Konrad Reuss, S&P managing director for southern Africa, said.

"Growth is likely to slow somewhat, but we don't see South Africa going into a recession," he said in a statement.

Africa's biggest economy has grown rapidly over the past four years, averaging about 5% expansion and reaching a more than two decade record of 5.4% in 2006.

However, expected slower global growth and a domestic power crisis are widely expected to crimp output in 2008.

A Reuters poll of 22 analysts released on Thursday showed growth would likely ease to 3.7% this year before recovering to 4.4% in 2009.

Consumers are feeling the pinch from higher interest rates aimed at taming accelerating inflation and industry has been hard-hit by a crippling electricity shortages that forced production at the country's platinum and key gold mines to halt for five days last month.

Retail sales contracted by 0.5% year-on-year in December - a six-year low - while output from manufacturers, which account for 17% of the economy, expanded by just 0.3%.

Reuss also said heightened political uncertainty had complicated the picture for investors, but said the agency had confidence in South Africa's stability and economic future.

Jacob Zuma, who is backed by the ruling African National Congress' trade union and communist allies, ousted President Thabo Mbeki for party leader in December, raising concern over the direction of economic policy.

Zuma - the frontrunner for national president in 2009 - is also facing corruption charges that are set for trial in August.

Standard & Poor's rates South Africa BBB+ with a stable outlook.

- Reuters
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"The country is going through a difficult phase with capacity constraints and emerging and continued inflationary pressures after a period of strong growth," Konrad Reuss, S&P managing director for southern Africa, said.
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Could someone please help me with this? I cant seem to figure out the "Stong Growth" that is being mentioned here...Could it be that these stastistics are wrong? :confused:
 
Robin Hood said:
Could someone please help me with this? I cant seem to figure out the "Stong Growth" that is being mentioned here...Could it be that these stastistics are wrong? :confused:
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Well it's S&P - don't think that they could be wrong with anything.
 
theratman said:
2004-4.9%
2005-5.0%
2006-5.4%
2007-5.0%
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and since...

USA economy started wobbling.
Eskom put a bolt in the works..
GDP is down.
SA's Deficit doubled (and that is funded mainly by interest from investments)

Makes you think why Tito upped the rates... the Deficit needs paying :D
 
Ricard said:
and since...

USA economy started wobbling.
Eskom put a bolt in the works..
Click to expand...

unfortunately one has to consider ^^ :o

What was the last time the SA economy was in a recession ? (on topic replies :) only)
 
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