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.”
