Yesterday Deputy Trade and Industry Minister Rob Davies said that growth was still predicted for South Africa in the year ahead despite a contraction in the fourth quarter of 2008.
Last week there had been rumblings of South Africa being in a recession and being in desperate need of an emergency rate cut, but the people in power, namely Tito Mboweni and Trevor Manuel do not necessarily share that view.
Manuel denied that we were in a recession and said fear mongering by less experienced individuals was irresponsible. It also appears an emergency rate cut by Mboweni is highly unlikely at this stage. Perhaps we are better off than we imagine, but it is still rather confusing, who should we believe?
Much of the growth predicted by Davies is based on high expectations for the 2010 FIFA World Cup and everything that is happening because of it, such as job creation, ticket sales and tourism, as well as road, rail and port upgrades. According to Davies the biggest macro-economic challenge the country faces is the current account deficit, but even that is expected to improve within the upcoming months.
So, who are we to believe? Give us your opinion.
When US and UK goes into recession SA has always followed. SA is not an island to the rest of the world. We don’t need Econ 101 to know that! It might not be here…yet. But it is coming!