What's in store for the future?

By Staff Writer
The South African Reserve Bank has released its Monetary Policy Review on the 14th of May 2009. The last review came out in November 2008. GDP contracted at an annualised rate of 1.8% in the final quarter of 2008. This is a result of a number of factors including the global financial problems and inflation. We are still in for a tough time ahead and the markets are not expected to come right too quickly. So what can you do while the turbulence washes over us?

 

 

There is now a real possibility that we will enter into recession for the first time in 17 years and the contracting growth we are seeing is expected to last for most of the rest of the year with a turnaround envisaged towards the beginning of 2010 only. Inflation is slowing, partly as a result of the inflation targeting steps taken by the Monetary Policy Committee in cutting interest rates and partly due to the slowing economy damping spending and inflation at the same time. We are not expected to hit the targeted range of 3-6 percent inflation this year although we should come in close to the top end of the target. There are still problems that may occur including a massive hike in Eskom tariffs to fund infrastructure spending.

The report estimates that inflation will hit 6.2 percent by the end of 2009 although this is an estimate with, as with all economics, a heavy dose of Ceteris Paribus, or if nothing else comes along to upset the apple cart. This is a serious flaw in economic thought as projections and estimates always lag behind the reality and reality is in a constant state of flux and it is not really possible to separate factors and treat them as independent when in fact they are highly interlinked and influence each other. So we can expect some light on the horizon but now is the time to expect change and prepare yourself for any shocks that could still occur, plan a budget and stick to it and start putting money aside for just in case.

 

Recent Articles

Featured Register your customary marriage or lose the right to inherit estate

December is that time of the year when we will see at least one suitor sending his uncles to negotiate the price of his future wife. Lobola, as the bride price is known, has always been an important element of the African marriage.

Read more

Changing from one medical scheme to another - effortlessly

It is coming up to the end of the year and you might be looking to change medical schemes, or options within a scheme in preparation for the new year. While you don’t necessarily have to wait for year-end to do so, providers often recommend it.

Read more

Your guide to financially surviving Christmas

There are a few times each year where you need to dig deeper into your pocket and spend more money such as birthdays, anniversaries, and the Christmas period. Whether you celebrate this religious holiday or not, the festive period - depending on how you choose to spend it - means increased travelling, buying of gifts, entertaining, and eating out at restaurants.


Read more

Trump, Trump and a little bit of South Africa

What a November we had, with the rand staging one of its best months and closing below the R14.00 level. To be honest, this looked like quite a far-fetched possibility at one stage during the month. It seems that the tide has changed a little, even though it might be short lived since the US dollar bulls are not so sure of their case anymore.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Free iCollege Scholarship

Price: R600
When: Until 16 May 2019
Where: Nationwide

Telkom December Big Deal

Price: R459 pm
When: Until 31 December
Where: Nationwide

Money Savvy Kids Giveaway

Price: R450
When: 8 December
Where: Johannesburg (Milpark)