SA ‘perfectly positioned’ for speedy recovery

South Africa’s economy could recover from the global downturn faster than those of developed countries, according to Dr Roelof Botha, economic adviser to PricewaterhouseCoopers (PwC). He told the 2009 Agriweek in Paarl recently that certain contributing factors that were driving stronger economies down seemed to be playing into the hands of emerging market economies, like South Africa, that possess fundamental macro-economic stability. Even though some avenues for investments have dried up, fund managers are still receiving vast amounts of contractual savings, mainly from pension fund contributors. The South African government medium-term infrastructure programme of R1-trillion is also expected to lead the continuation of the country’s largest broad based capital formation phase in history. A modest recovery of commodity markets is another contributing factor to the recovery and local exporters should benefit from it in the months ahead. In South Africa the Consumer Price Index (CPI) is expected to fall within the 3% to 6% target range by the middle of the year. “Rapidly declining inflation will gradually enhance the purchasing power of households for the rest of 2009. This will help in fighting the effects of inflation,” says Botha. “The prime rate is expected to drop to 11.5% and if this happens the disposable income of households will increase by approximately R7 billion per month.”