ECONOMY
Spending boom far from over
Posted Fri, 22 Jul 2005
It was clear that the consumer spending boom was far from over,
the Bureau for Economic Research said on Thursday in its latest
forecast for the South African economy.
It said a string of second quarter economic indicators showed
that though the pace had cooled from the "unsustainable " tempo at
the end of 2004, the boom was continuing.
The outlook for domestic spending was also supported by the
favourable outlook for inflation and interest rates.
"Bar unforeseen shocks, the South African economy is... expected
to perform well; the BER forecasts real GDP growth of 4.2 percent
in 2005 and 3.9 percent next year," it said.
It warned, though, that "downside" risks should not be ignored.
The post 9/11 world was an uncertain one, and oil price
volatility and United States dollar and interest rate uncertainty
clouded the outlook.
A sharper than expected increase in domestic interest rates and
weaker global economic growth
could produce a more pronounced
domestic economic slowdown in 2006.
Sapa
| 
