Given South Africa’s current economic scenario, there is no viable catalyst that can lift the country’s immediate and medium-term growth prospects out of the moribund 2% that appears to be in the offing.
That’s the view of Luke Doig, senior economist at Credit Guarantee Insurance Corporation (CGIC), who questions whether even this mediocre target is attainable. “Hopefully this year will not be referred to as ‘R20/£’ or ‘R13/$’, because this may invoke sharply higher interest rates.”
Doig also pointed to the fact that the business confidence indicator (BCI), compiled by Rand Merchant Bank (RMB) and Stellenbosch Uni’s Bureau for Economic Research (BER), had averaged just 45 since the beginning of 2010. “This,” he added, “reflecting the myriad challenges facing SA business. Confidence both among consumers and businesses alike is unlikely to see a strong and sustained move above 50 until the second half of 2016.”
To read the full FTW article, click here.
FTW pick: ‘Cheer up, the worst is yet to come’
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