We can avoid recession — Manuel

[Necuno]

We can avoid recession — Manuel

But he warns things will get worse, then better

South Africa’s economy is likely to keep growing despite the recession that is sinking major world economies, finance minister Trevor Manuel said yesterday.

“Can we avoid a recession? I am still pretty confident we can,” he said in an exclusive interview with the Sunday Times before heading to the World Economic Forum in Davos, Switzerland, where government and business leaders will discuss the global meltdown that is collapsing banks and businesses that were once household names.

Manuel said he was confident that South Africa would not sink into a recession this year, but he added: “I say this year, because normally we would have a lot more assurance about a slightly longer term. But the rate of information change is phenomenal.”

A recession is defined as six months in which the output of goods and services shrinks. Most economists expect overall economic output in South Africa to grow slightly this year.

This week, Britain joined the US, Eurozone and Japan in formal recession.

Manuel tempered his optimistic message with a warning that things probably would get worse before they got better and said some of the promises in the ANC election manifesto — including a state-funded national health insurance scheme — might have to wait until the economy picked up.

But he promised that the government would definitely be able to meet its R116-billion social welfare commitment to the 12 million people who depend on state grants to survive.

“The wealthy can look after themselves. The poor and the unemployed can’t and we must be mindful of that. The welfare programme as it stands. . . clearly, it must continue,” he said.

Manuel defended the fiscal discipline that had shielded SA from the first wave of the global crisis.

“There might be those who clearly want to tar and feather me for being finance minister through the period where all of this has happened, but there are issues that I think have actually stood us in better stead, that have helped us through.”

Manuel will reveal the full impact of the crisis in the budget he is scheduled to deliver on February 11.

He is expected to lower the official growth forecast to about 1% of gross domestic product and to forecast a sharply increased budget deficit as corporate and personal tax revenues fall.

Manuel declined to discuss a specific fiscal stimulus package ahead of the budget, but said SA was already making the kinds of investments in infrastructure and productivity that other countries were just beginning to contemplate. Many were linked to the 2010 Soccer World Cup, but would have lasting benefits for the country.

He said the crisis required new thinking on how to manage domestic and global economies, and part of that would have to be an end to the cult of greed and excess “which is equally a problem here as everywhere else”.

In an apparent reference to policy squabbles in the ANC, he said: “I know that I am too much of a stupid dreamer, but revolutions are acts of love. We didn’t take on the struggle against apartheid because we were jealous of white people. It was about values in society, it was about understanding that we didn’t want a turn to do to anybody what they were doing to us. It’s about changing what has been fundamentally wrong throughout colonial periods and under apartheid, and that sense isn’t getting through.”

 

[Ricard]

Maybe Trevvie should speak to his wife, or someone at ABSA

http://www.steelguru.com/news/index...-_SA_manufacturing_drops_most_in_9_years.html

M Monale Ratsoma treasury economist at Absa Group Limited said that "This economy is in recession. Everywhere you look, there is no good story retail and mining has contracted, and now it’s manufacturing. There is the risk of an interest rate cut of more than 50 basis points."

 

[.Froot.]

I heard that Manuel is leaving after the next elections
I can understand that he's tired of all the ANC's crap, but he is the best man for the job...

 

[Hosehead]

I heard he's been offered a position at the World Bank. Any truth to that?

 

[kingmonty]

But he promised that the government would definitely be able to meet its R116-billion social welfare commitment to the 12 million people who depend on state grants to survive.

More than a quarter of South African citizens are on welfare? WTF, **** becoming a welfare state, we already are a welfare state.

 

[Alan]

More than a quarter of South African citizens are on welfare? WTF, **** becoming a welfare state, we already are a welfare state.

Not really. Most of the money probably doesn't get anywhere near the masses.

 

[Kosmik]

Not really. Most of the money probably doesn't get anywhere near the masses.

So true , so true.

 

[Vitowe]

I heard he's been offered a position at the World Bank. Any truth to that?

Well a dumb comment like "We can avoid a recession" when we are already in one could cost him that offer of a job. Is the man on heavy medication or something more mindbending? Up to now he seemed reasonably stable.

 

[kingmonty]

Well a dumb comment like "We can avoid a recession" when we are already in one could cost him that offer of a job. Is the man on heavy medication or something more mindbending? Up to now he seemed reasonably stable.

It's electioneering. The ANC is trying to convince people to vote for it, and it seems they are trying to discredit capitalism in the campaign to get votes.

The only reason we're not technically in recession in accordance to the definition of a recession (6 months of no growth) across all sectors is because of our massive construction budget allocation on the balance sheet. Take that away and this country is very much in recession, quite possibly even a deep recession.

Trevor Manuel and all the other ANC drones will be sprouting the same bull****: the ANC is earmarking billions to the people. The real reason behind this: the new order in the ANC has a communistic slant on governance.

 

[noxibox]

Well a dumb comment like "We can avoid a recession" when we are already in one could cost him that offer of a job.

Probably increase his chances.

The only reason we're not technically in recession in accordance to the definition of a recession (6 months of no growth) across all sectors is because of our massive construction budget allocation on the balance sheet.

It is usually mentioned in every article I read about the current state of the economy. The masses are quite probably oblivious to it.

It's not the only area showing growth though. Some food retailers are doing well. Others like Woolworths are having to adjust to maintain.

The current situation is a golden opportunity for all developing economies. I doubt the ANC circus has the sense to take proper advantage.

 

[Albereth]

Yes, we can!

Okay, this is just going too far.