'No storm, just a little turbulence'

Preotoria - "Ladies and gentlemen, we find ourselves not in a storm but merely experiencing a little turbulence, and the sun will soon break through again."

This comforting thought comes from Dr Roelof Botha, economic adviser to PricewaterhouseCoopers (PwC), who concluded his reflection on the budget with this message.

Botha claims it is ridiculous to compare the Great Depression of 1929 with our current situation.

South Africa is definitely not in a recession although certain sectors, such as the motor industry, are indeed experiencing one. For that reason, he says, it is incomprehensible that banks are refusing to lend. Not everyone is a dealer in luxury vehicles who until recently sold 27 units a month and now complains that now only seven being sold.

The inflation rate is dropping like a stone, he says, and Reserve Bank Governor Tito Mboweni is extremely anxious to lower the interest rate.

Botha predicts a faster turnaround in the South African economy than many expect.

He recently heard from a number of "influential construction company bosses" that the taps of the construction industry are due to open once more as soon as the prime lending rate touches 13%.

Earlier this month Mboweni sliced the interest rate by one percentage point and was prepared to cut it even further. After the monetary policy committee's first meeting of the year he declared inflation should average 5.2% by the third quarter.

Botha expects the prime lending rate to reach 11% in the second half of the year, and inflation 6%.

Countries like Japan, Germany, the US and Britain will still see negative growth this year, but those like Mexico, Brazil, Indonesia, Russia, India and China continue to have growth prospects of between 2.5% and 8%.

If Finance Minister Trevor Manuel says the economy will grow by 1.2%, one can pencil in 2.2%, contends Botha.

- Sake24.com

For more business news in Afrikaans, go to .