Mboweni expects a slow down

By Staff Writer

Compare banks and save with Justmoney

Mboweni expects a slow down

The Guv, Tito Mboweni, gave a speech at a diplomat's dinner last night.

The Mail and Guardian reported that Mboweni noted that our inflation outlook had improved and that hopefully the downward movements we have seen since August was becoming a trend. This may bode well for any early cut n the interest rate. Guv Tito also pointed out that South African banks had largely escaped the financial crisis.

Sound policies including the National Credit Act and exchange controls have limited our exposure to the 'toxic' securities that have brought down the rest of the world's financial systems. However Mboweni also noted that there were obstacles still in our path notably the impact on imports caused by the weakening Rand against international currencies.

The Guv was confident that we would avoid a recession but warned that the real economy would be hit by the global collapse and that a slowdown was to be expected.

Business Day covered the Reserve Bank Governors' speech highlighting that Mboweni believes that policy makers should 'take note' of both the lower inflation and slower growth when they make their decisions. The repeated that Mboweni was 'hopeful' that inflation was now on a downward trend. The rest of the article looked at international economics.

iAfrica also covered the governor's speech quoting him as saying that the outlook "is not viewed as being particularly favourable". In a related article iAfrica spoke to an economist who felt that all the necessary space for an early rate cut to happen was there. This same economist has received a lot of flak recently for suggesting that in reality inflation was already 2 percentage points lower than published due to the re-weighting of the CPI basket of goods. However it seems that the market believes him as it is already pricing these figures in. He also reckoned that a further percent would be cut due to effects such as the lower price of oil. He advised policy makers to rather target bolstering consumer confidence and propping up new vehicle sales.

The Times reported that PPI or Producer Price Index has dropped. This is the measure of inflation for producers, which means how much more is it costing to make stuff. These drops are due to lower power and petrol prices but it was noted that these savings were not being passed on to the consumer.

The Mail and Guardian also covered these figures, noting that they had dropped from 16% to 14.5%. They carried comment from Nedbank, stating that 'inflationary pressures were moderating'.

In other news The Dispatch reported on the SA institute of race relations annual review. There was concern that income inequality has risen over the last ten years, although they pointed out that this could in part be explained by a general increase in incomes.

Justmoney says that things may be looking a bit brighter but now is still the time to increase your savings, get a cheaper credit card and wait for the storm to pass.

Recent Articles

Featured Debt consolidation – Explained

Dealing with debt can be daunting. If you’re struggling to keep track of which store account to pay next and weighing up which credit card is more important to settle first, you may have considered debt consolation. At Justmoney, we’ve decided to get down to the basics and explain what this entails and what impact you can anticipate on your credit score.  

Read more

3 Vehicle financing options compared – which is cheaper?

Buying a car is a considered a milestone, both in life and financially. Unless you’re able to fork out the cash, many opt for financing. But often the excitement to drive it off the showroom floor overshadows the need to check if you’re choosing the most-suited option. To help you make the best-informed decision we compare available vehicle financing structures in South Africa.

Read more

Splitwise: Split the bill not the friendship

Collecting your friends’ debt to you can be draining. You don’t want to ruin your friendship with them, and it can also be extremely awkward. I don’t know how many times I have written, deleted, and rephrased texts, reminding people to pay what is due to me.

Read more

Stokvel-friendly accounts – which one is fair?

The stokvel economy is approximately worth R49 billion in South Africa. This is according to the National Stokvel Association of South Africa (Nasasa). Altogether 24% of these stokvels are in Gauteng, while only 6% are in the Western Cape.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Cape Town Fish Market Swartland Special

Price: From R123
When: Until 14 July
Where: Cape Town

Aha Casa do Sol Pay 2 Stay 3 Special

Price: R1,200
When: Until 31 July
Where: Mpumalanga

Open University Free Courses

Price: Free
When: Daily
Where: Online