News-Archive (Page 7)
South Africa's Reserve Bank's 50 basis-point cut to the repo rate on Thursday was welcomed by many, including the property sector, but there were warnings from others.
Pam Golding Property group said it would provide the property market with a confidence boost.
The bank's monetary policy committee cut the repo rate to 5.5% following its two-day meeting. This will translate to the prime lending rate dropping from 9,5% to 9%.
The Bureau for Economic Research (BER) expects the South African Reserve Bank's monetary policy committee to lower the policy setting repo rate to a record low of 5.5% next week.
The BER, which is based at Stellenbosch University and which conducts important research for the SARB, released its latest forecasts at a conference yesterday.
Senior economist Hugo Pienaar said recent data had led to a revision of its outlook: "More recent events - including further job losses in the third quarter of 2010, the continued rand strength versus the US dollar and the explicit focus on accommodative monetary policy in government's new growth path initiative (see report in IBN Monthly Brief 10/2010) - have tilted the scales towards another 50 basis points reduction."
A cut would bring the prime lending rate charged by banks down to 9%. Let's wait and see!!
Finance Minister Pravin Gordhan confirmed on Tuesday that revenue last year was about R8bn more than expected, and expenditure a bit less.
Speaking in the National Assembly during debate on his Budget vote, Gordhan said the budget deficit was 6.7% of gross domestic product (GDP) - rather better than the anticipated 7.3%, though considerably wider than 1% of GDP recorded in 2008/09.
"The Ministers' Committee on the Budget and the treasury have begun work on next year's budget," he said.
"Preliminary data suggest that we will see moderate economic growth this year, perhaps somewhat higher than we projected in February.
"But last week's employment statistics were a sobering reminder that more must be done, more urgently, to restructure our economy and create jobs, particularly for young people."
Gordhan expressed appreciation for the many thousands of public servants who had quietly and diligently kept orderly books of account over the past year, contributing to sound audit reports and measurable value for money in government spending.
"The heroes of good governance are these honest, hard-working officials," he said.
Consumer inflation slowed a little more than expected last month to a four-year low, official data showed yesterday, leaving the door open for another interest rate cut.Statistics SA said consumer inflation slowed to 3.5% year-on-year in August from 3.7% in July, a touch lower than the forecasts of 3.6%. The reading was the lowest since April 2006.
Month-on-month, the CPI braked to 0.1% from 0.6% in July, lower than the 0.2% expected in a Reuters poll last week.
The Reserve Bank expects inflation to remain within its 3% to 6% target range until the end of 2012.
Partly on that benign inflation outlook, and to boost a sluggish recovery, the Bank cut the repo rate earlier this month, bringing rate reductions since December 2008 to 600 basis points.
Colen Garrow, an economist at Brait, said: "I'd say we should not be dismissive of another rate cut. The question is one of timing: whether it will be in November or next year.
Finance Minister Pravin Gordhan called on local and foreign business to make more investments with a developmental thrust at the opening of the ANC's national general council meeting on Monday, 20 September 2010.
Speaking at a breakfast before President Jacob Zuma's opening speech, Gordhan said his recent travels abroad had underlined the extent to which emerging markets, including South Africa and the rest of Africa, were the new focus of investors.
The latest trend, in addition to the short-term investment that had buoyed South Africa through a sustained balance of payments deficit, was to look for longer-term investments, including capital and infrastructure projects of 30 years or more.
But the rules of engagement in the global economy were changing, he said.
"It is crucial for business and investors to understand the new world in which they need to operate. Africa is no longer the dark continent, it is very much part of a new world view.
"When you come here, do so in a way that creates jobs, builds skills and builds capacity."
