Reuters Survey of Economists
The September edition of the Reuters South African Survey of Economists has just been published. (The Reuters 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 an index). The weightings used in the index are: GDP growth – 25%; CPIX inflation – 20%; Producer Price Inflation – 5%; Prime Interest Rate – 20%; 10-year bond yield – 5%; Rand-Dollar Depreciation – 25%.
The Reuters Econometer feel for second consecutive month in September, falling to 241,51 from 247,90. Confidence fell as a stronger rand was expected to suppress exports and interest rates are now seen rising earlier than first expected. The economy is expected to grow next year, however a stronger rand is seen limiting the extent of the recovery. Inflation has been outside the target band since April 2007, expectation is still for inflation to fall within the target range by Q2 2010. The rand is now expected to end this year at R7.95/$, compared to R8,41/$ seen in the August survey. The rand has appreciated more than 25% against the dollar this year. The stronger rand is expected to dent the competitiveness of exports, as well as weigh on the mining and manufacturing sector. The economy is starting to show signs of increased stabilization, however the pace of the recovery is likely to be slow.
The “October” survey will be published 5 November 2009.
Please click the thumbnail below for the full report.
Source: Sasfin Securities, October 11, 2009.
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