South Africa may technically
be out of a recession but the
road ahead for the country’s
economy will not be easy,
according to Business Unity
South Africa (Busa).
Speaking on the forecasts
for 2010, Busa deputy chief
executive officer Raymond
Parsons said the economy
remained extremely weak and
a slow recovery was expected
in coming months.
“Busa believes South
Africa has technically ended
its recession and we see that
inflation has dipped into the
target band,” said Parsons.
“These are positive signs, but
they must not detract from
the reality that our economy
remains weak.”
He said it was now more
important than ever not to
administer any shocks to the
economy. Describing 2010 as
the year of recovery, he said
it was important for
South Africa to do better in
coming months.
“We forecast the gross
domestic product for 2010
at about 2.2%. Our recovery
will be slow and the pace of
the global recovery will be an
essential factor.”
Busa CEO Jerry Vilakazi
said employment growth
continued to lag the
economic recovery. “Poverty
remains a major threat to
social cohesion in South
Africa,” he said. And with
debt still a major concern
he said these were all issues
that were of concern to
businesses.
“Today’s difficult
economic environment
underscores the importance
of not losing sight of longterm
competitiveness
fundamentals and shortterm
urgencies. Competitive
economies are those that have
in place factors driving the
productivity enhancements
on which their present and
future prosperity is built.”
Vilakazi said an
environment supporting
competition could help the
economy weather business
cycle downturns and ensure
that the mechanisms enabling
solid economic performance
were in place.
According to Parsons it
was important to boost job
creation and productivity
while also looking at
developing new and
better business models for
parastatals such as Eskom.
“Policies to encourage a
recovery should not burden
future generations with large
pubic debt, high inflation
rates and low growth. The
Budget in February 2010
should indicate how the fiscal
deficit will gradually be
wound down.”
Recovery will be slow - Busa
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