Research shows growth slows
Well its back to the doom and gloom cycle again.
Yesterday the Bureau for Economic Research (BER) released its latest data. The BER was started in 1944 and is attached to the University of Stellenbosch. Business Report stated that the BER had cut its forecast for next year to 1.9%.
This would be the tardiest rate that we have grown at in ten years, and probably due in it's entirety to the international credit crisis. Their previous estimate had been for 3% growth.
This is in contrast to the Treasury estimates a 3.7% growth. However at the BER conference Treasury head of the budget office, Kuben Naidoo, said that the treasury is ready to step in and spend to support our economy. He said that we are ready to take on higher deficits, and that Treasury was ready to close the current account deficit to prevent a collapse of confidence in our economy.
We have already had R 52 billion pulled out this year.
The Dispatch also carried this story and stated that Naidoo dismissed any policy change from the ANC, saying that they would come to the same conclusions regarding the right policy for the situation as those policies that are already being implemented.
The entire Treasury response is to calm market fears and to let markets know that they are prepared and ready to go with support programmes if they are needed. This will almost guarantee that they will have to step in, because if private investment is falling due to fear and government is willing to step in then tax payer's money will more than likely be spent.
Business Day also covered the BER conference although their take was focussed on the possibility of an interest rate cut. The BER data seems to support a downward movement as the next interest rate change.
However as a caveat the BER had concerns that the current account deficit could be a drain on the ability of the MPC to cut rates. And in true economist fashion say that under certain circumstance the rates could forsee ably rise again. The main stream forecast was for rate cuts to begin in the second half of next year.
iAfrica carried an opinion from Old Mutual that predicted the South African Reserve Bank to begin lowering its rates from February 2009. Inflation is starting to come under control and the real economy was weakening leading to pressure for stimulation via rate cuts.
Statistics SA also released important data yesterday.
Business Report tells us that the number of debt summonses had increase 16.7% in the last three months, but that in mitigation of this the number of judgements actually granted fell by 13.7%.
Justmoney would see this as a clear indication that if you are experiencing debt problems then you should contact a debt counsellor immediately, rather than pull an ostrich and pretend it's not happening. A debt counsellor can help you to hold on to your assets even if they are issuing summonses against you.
In a final note Justmoney would like to hear from you. Send us your comments, stories, losses and wins to Editor@justmoney.co.za and we will get our team of experts to look at your view here.