As the world faces yet another challenging economical environment it is imperative that business in South Africa prepares for the weakening of the rand and slower GDP growth, according to Michael Keenan of Standard Bank. Speaking at the official name change of Buffalo Freight to Unitrans Freight Forwarding and Clearing in Johannesburg last week, Keenan said the markets remained extremely volatile, and while predictions were difficult to make all indications were that growth would slow down more than was previously expected. “The South African economic recovery is expected to lag behind that of the rest of the world,” he said. “But indications are that we have been too optimistic in recent months and what we have been seeing the last couple of weeks has been alarming. No doubt we will feel the slowdown later than other countries and therefore we are expecting growth to be very moderate next year.” With growth estimated in the region of 3.4%, Keenan said South Africa would not see the 5 and 6% growth of the past few years. “One of the reasons is that we don’t have the investment spend that we saw prior to the World Cup and that is not just from the public sector but also from the private sector,” he said. “The other big drag on growth is the external sector and the expectation is that our exports will suffer in the coming months. That will also hurt our growth.”
