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SA economy to 'muddle along' in 2012

Jan 25 2012 22:00 Sapa

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Johannesburg - South Africa's economy will "muddle along" in 2012, economists said on Wednesday.

"I cannot get overly excited by what's going on in the economy... it's muddling along, not too bad, but not too good," Econometrix chief economist Azar Jammine told a seminar at the Gordon Institute of Business Science.

The country has enormous potential with pockets of excellence; yet that is not translated into the upliftment of the whole nation, he said.

Chris Hart, chief strategist at Investment Solutions, was also not too excited about 2012.

"It will be like kissing your sister, neither here nor there," he said.

"There is nothing to suggest we are going to go into acceleration of growth or decline. It will be another bumbling along kind of a year."

Hart said the issues South Africa faces this year - unemployment, the widening wealth gap, inflation and stagnation - are those faced by the rest of the world.

By the end of 2012, new governments would be installed across much of Europe, including France and Germany.

"Incumbency is being punished... the irony is that in South Africa incumbency is not being punished."

The African National Congress is one of the few ruling parties around the world that has the luxury of incumbency, which allows it to make long-term decisions, he said.

Hart said the repo rate would probably remain unchanged at 5.5% for 2012, unless there were huge swings in the rand exchange rate.

Jammine said he expects 2012 to be "tough but not disastrous".

South Africa needs to concentrate on developing small businesses and entrepreneurship, he said.

 
 
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