Related Articles
Top Stories
May 27 2012 11:21
There's a price war raging between South Africa's cellphone networks after Cell C lowered the rates of its prepaid calls by more than 34%.
May 27 2012 11:49
The country's 200 000-odd Tupperware agents are angry about the counterfeit products being sold as the real McCoy.
May 27 2012 13:09
The oversupply of golf estates has claimed another victim.
Johannesburg - Business Unity SA (Busa) has cut its economic growth
forecast for this year from 3.4% to 3.1% after a meeting
of its economic policy committee on Friday.
"(This) is broadly in line with what many business
economists are now indicating in the light of new realities," the
business lobby group said in a statement.
The decision to lower the 2011 forecast was taken in
the light of various global and domestic economic trends, including the
expected slowdown in the global economy to about 4% growth.
Advanced economies were now expected to grow at a rate of around 1.7% and developing economies at 6.3%.
The risk of a double-dip recession in some countries and the economic problems in the eurozone were risks to growth.
The African Development Bank had reduced its forecast for African economic growth in 2011 from 3.7% to 3.2%.
Busa also considered the less-than-robust growth and
business conditions in South Africa in the second and third quarters of
2011, including the sharp 6% drop in manufacturing output in
July.
"Over the month, output in most manufacturing industries dropped sharply.
"Protracted strike action disrupted production in the
fuel, chemicals, and metals industries, while ongoing outages at key
iron and steel plants added further pressure," Busa said.
Higher electricity and transport costs and rising labour costs were constraining competitiveness and profitability.
"Overall growth - with some sectoral exceptions, such
as retail - is likely to remain less than optimal in coming months, and
unable to support widespread job creation."
Busa said the conditions suggested that interest rates would need to stay low for longer, possibly well into 2012.
A further cut in the repo rate could soon be necessary.
"Turkey and Brazil have already cut interest rates
recently, and Chile, Israel, Mexico, and South Africa are seen as
possibly doing so in coming months," Busa said.
The SA Reserve Bank's Monetary Policy Committee announces its next policy decision on the repo rate on September 22.