SOUTH AFRICA has inherent strength in its economy pointing to a fairly optimistic outlook for medium-term growth.
That's the view of Azar Jammine, chief economist for Econometrix, who believes growth is picking-up fairly steadily after the last four to five quarters of near-recessive conditions.
Also, he said, we bottomed-out last year at a zero percent growth rate. Previously it was minus 3%-4%.
The economy might have turned for the better, some of this coming from the structural adjustments that have been made.
A lot of the signs are now right, he added. Interest rates have fallen more than most expected, he told FTW. Retail sales grew 5% in February, the best in five years.
Manufacturing production, electricity off-take, retail sales, car sales, good exports, commodity prices improving all point to an upturn.
And international perception?
We've managed to get through two years when international business shied-away from investment in the emerging markets, said Jammine. This alongside the Asian crisis - leading to the economic collapse in Brazil, and with obvious adverse spin-offs for SA.
But we weathered this, said Jammine.
The declining rand?
Nowhere near as bad as many people have painted it, Jammine told FTW.
We plot a trade-weighted index of the rand, he said. It has declined this year, for example, by 3.5%.
But we do have a rather higher inflation rate than many other countries, and this would mean we only had an actual decline of about 2.5%.
The current effect on the rand of the Zimbabwean woes should also not be over-emphasised, added Jammine. It is having an effect, he said, but not as much as one might think.
Other effects are more significant.
The Australian dollar has taken even more of a beating in recent times, said Jammine.
This would indicate that commodity-based countries (like Australia and SA) are in doubt.
Jammine, however, is fairly positive about the next two-to-three years - although creating jobs is still a problem.
Increasing production is not producing more jobs, he said. So it's not percolating down through the economy.
Now is the time, added Jammine, for changes of culture in the education and labour arenas. That's where hope for the future lies.
We must get a move on, and start educating the people, he said. We also need to create more harmony between the unions and business.
No jobs being created might drive people to get up and get going.
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