Colen Garrow
Colen Garrow
alter case cement developing economy hike interest market move needs next numbers rates side stance
This is going to cement the case to hike interest rates. The numbers do nothing to alter the stance now developing in the market that the next move in interest rates will be up. The consumption side of the economy needs to be slowed.
code considered exchange good hardly interest issue likely matter moral observers rand rate
Another issue likely to resurface is the matter of 'a more competitive exchange rate', deciphered as code for the rand to weaken. Moral suasion such as this may be good for export-biased manufacturers, but will hardly be considered good for observers of inflation, or long-term interest rate markets.
economy grow irony looking needs saying shows south
The irony is that it wasn't so long ago that South Africans were saying that the economy needs to grow at 3%. Now we're looking at 3,3% and saying it's dismal. It shows how the expectations have shifted.
disposable employed income money retail south spent
In short, more South Africans employed suggests more disposable income and more money being spent on retail goods.
additional affordable appear budget collection costs cuts dependency earners exceeding finance fiscal housing income likely low middle minister national personal relief revenue tax welfare
It would appear that with revenue collection exceeding budget this fiscal year, additional tax relief may be forthcoming when Finance Minister Trevor Manuel unveils the national Budget for 2006/2007 on 15th February. Welfare and dependency grants, personal income tax relief, and cuts in those costs which would make housing more affordable for middle and low income earners are likely to buoy consumption expenditure, and manufacturing.
currency growth hold potential pressure reaching sector
Manufacturing will be under pressure because of currency strength. It will hold the sector back and (keep) growth from reaching its potential level.
government situation thus
The situation as it is, is thus inequitable and will have to be addressed by government at some stage.
business estate mining relative sector service size
The relative size of the mining sector is dwarfed by the contribution of the finance, real estate and business service sector's 19,5%.
committee cycle easier provides reminder stance taken useful
The stance the committee has taken probably provides a useful reminder that the easier interest-rate cycle has bottomed.
activities currency goods impact imported persistent similar strength
Persistent currency strength has had a detrimental impact on export-based activities in the manufacturing sector, making similar imported goods more competitive.
balance budget despite fiscal good odd south
Despite the odd shortcoming, this Budget is on balance good. It entrenches South Africa's good fiscal record.
interest meets next rates
The SARB will probably do nothing with interest rates when it meets next week.
allow attract committee concerned credit element growth inflation introduce last monetary month policy sufficient
The monetary policy committee cautioned last month that it may not allow growth in credit to go unchecked, inferring that it may be concerned that consumption expenditure could introduce an element of inflation sufficient to attract a monetary tightening response.
battling crippled mining sector similar strong supply
Manufacturing is not the only supply sector battling a strong currency. Mining is being crippled by a similar problem.