Eurozone growth could kick-start exports

The plunge in the rand from the beginning of 2013 should theoretically have given SA exports a significant pricecompetitive boost, according to Luke Doig, senior economist at Credit Guarantee Insurance Corporation (CGIC). But other dynamics in SA industry over that period have likely countered any gains made by weakening rand exchange rates. Is the rand’s almost 30% decline from R8.40/$ on 31/12/2012 sufficient to boost exports? “One would expect so,” said Doig. “And, if the Eurozone could grow by 1% this year as the IMF expects – after contracting by 0.4% last year – this may well provide SA exporters with some much-needed additional demand.” But this beneficial price competition could well be countered by other factors which have had, or are having, an adverse impact on the global perception of trading with this country – such as labour unrest, low productivity, political uncertainty and a generally weak growth outlook.