Better growth expected next year

Alan Peat LAST YEAR'S predictions about the economic fall-out from 911 lasting till the end of 2002 turned out to be true, according to Peter Haasbroek, group economist of Barlows. "There was a strange phenomenon in the US in the first quarter which threatened to derail this forecast when they experienced strong growth," he said. But the US economy then stagnated, he added. "I stick with my prognosis of the downturn lasting till the end of this year," said Haasbroek, "with no increase in investment because expectations are depressed." However, SA is not suffering too badly from the post-911 hangover. "The rand has strengthened mainly on the back of the depressed US dollar," said Haasbroek, "and SA exports are growing nicely. "We are looking at 2% GDP (gross domestic product) growth this year, and any expectations for next year have to be for better growth." But, Haasbroek warned, beware of false hopes as growth will not increase fast. The European economy is not performing well, he said, and although the Far East has been a good performer it has largely been absorbed as the former Oriental Tigers lick deep wounds in their economies from their own recession. "So the US economy is still the guiding force and global fortunes will depend on what happens there," said Haasbroek.