Reuters SA Survey of Economists

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The March edition of the Reuters South African Survey of Economists has just been published.

SA economic confidence, as measured by the Reuters monthly Econometer, recovered in March from its lowest levels, since June 2004. (The Econometer is a measure of economic sentiment drawn from a monthly poll of forecasts by leading economists in South Africa and abroad and presented in the form of an index. The index reflects the forecasters’ sentiment for a quarter 12, 11 or 10 months forward.) The recovery was, however, marginal relative to the steep falls seen in the index over the past few months.


Despite the slightly better index reading, forecasts for key indicators were once again revised to the negative. GDP growth rates are expected to moderate further in all three forecast years to levels below the 5,1% rate recorded for FY2007, negatively impacted by electricity supply interruptions and slowing consumer demand.

Despite the cumulative 400 basis points increase to official interest rates since June 2006, CPIX inflation has continued to accelerate and is now forecast to maintain that upward trend until the end of Q2 2008 (previously Q1), before moderating towards the end of the year and into 2009. This expected extension to the rising inflationary trend has pushed expectations for interest rates yet higher, reflecting the possible further tightening ahead and interest rate cuts below current levels are now seen coming only in Q1 2009 (previously Q3 2008).

The rand, having been extremely volatile during March, is expected to weaken over the balance of this year, aggravated by a current account deficit that is seen staying extremely large and even growing substantially between now and the end of 2009.

Please click the thumbnail below for the full report.


Source: Sasfin, April 10, 2008.


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