‘Imports already starting to implode’

The outlook for exports and imports in 2009 is not sunny. While the South African Revenue Service (Sars) last week said there had been a month-on-month increase in imports of mineral products, machinery and precious metals and stones, as well as month-onmonth increases in exports of vehicles, mineral products and precious metals and stones for October, 2009 will see a definite decrease in our imports and exports. According to senior economist Nicola Welmal of the Nedbank Group’s Economic Unit, imports are already starting to implode. “History has shown when there is a downturn in consumer spending, imports slow down. We expect demand for imports to fall off sharply next year.” Welmal said this could be attributed directly to a drastic decrease in consumer spending in recent months. “The consumer across the world has gone into recession and is not buying, and the continued slump in household spending will put downward pressure on the demand for imported goods.” The scenario was further affected by the fall of the rand which would add to the cost of imported goods, said Welmal. “As companies across the world put plans to expand and grow on hold, we will also see capital imports slow down and become moderate.” She said exports would also be affected negatively. “I don’t see us escaping the world economic meltdown. Already we are seeing volumes and prices taking a beating with vehicle sales at their lowest ever. The demand for exports will slow down at an expected 0.05%. Vehicle exporters and the mining industry are expected to be affected more severely than others due to the lack of demand and the low prices.”