Higher economic growth is not only elusive to SA but other countries as well. Data on Friday showed that the US economy grew 2.2% in the fourth quarter‚ which was lower than the forecast 2.6%.
Not that this is to compare the world’s biggest economy to SA’s much smaller one‚ but it shows that all countries face the same problem of struggling to get their economies onto higher growth paths.
It has been a long time since SA’s economic growth projections were revised upwards. The problems are well documented‚ so South Africans need to adapt and help find solutions rather than pay lip service to the challenges.
It is not good for the economy that one of the rating agencies last week spoke about SA’s development framework‚ the National Development Plan (NDP)‚ in a way that was not very inspiring.
Fitch Ratings said in a statement that “efforts at implementing the NDP remain piecemeal‚ raising concerns about its effectiveness in boosting growth to the eventual target of 5%”.
While rating agencies are not everyone’s favourite‚ they do have valid points from time to time.
What is the point of having a master plan for economic growth but then be very slow in implementing it?
The government needs to identify departments‚ especially those focused on economic growth‚ and give them the responsibility of implementing the NDP.
Having fewer and specialised departments to handle the plan would make implementation quicker and monitoring easier and more efficient.
Data coming out tomorrow is expected to show a slowdown in activity in the manufacturing sector. The Kagiso purchasing managers index (PMI) is expected to have fallen to about 51 or 52 last month after rising to 54.2 in January from 50.2 in December.
A reading of above 50 represents manufacturing activity expansion.
Investec economists said the binding constraints on production imposed by national rolling power outages will be evident in the Kagiso PMI for last month.
They added that the external demand environment was also a suppressing factor on faster production growth.
The figures for electricity generated‚ to be released by Statistics SA on Thursday‚ are expected to show the extent of load-shedding‚ which intensified last month.
HSBC will release its PMI on the South African economy tomorrow and it is also unlikely to inspire any confidence.
The seasonally adjusted Markit-HSBC SA PMI fell to 49.8 in January from 50.2 in December‚ showing a deterioration in companies’ operating conditions at the start of the year‚ HSBC says.
Companies are blamed for losing confidence given the power outages‚ continuous downward revisions to economic growth forecasts‚ and “often confusing and ambiguous” legislative proposals‚ as one economist once put it.
The US economy growing less than forecast is a negative development for South Africa as it will hurt demand for local exports.
SA still needs capital inflows to finance the large deficit on its current account‚ although lower oil prices are expected to help narrow this shortfall.
So far the country has done very well in attracting capital despite all its challenges. — BDLive
SA not alone in the battle to boost economic growth
Not that this is to compare the world’s biggest economy to SA’s much smaller one‚ but it shows that all countries face the same problem of struggling to get their economies onto higher growth paths.
It has been a long time since SA’s economic growth projections were revised upwards. The problems are well documented‚ so South Africans need to adapt and help find solutions rather than pay lip service to the challenges.
It is not good for the economy that one of the rating agencies last week spoke about SA’s development framework‚ the National Development Plan (NDP)‚ in a way that was not very inspiring.
Fitch Ratings said in a statement that “efforts at implementing the NDP remain piecemeal‚ raising concerns about its effectiveness in boosting growth to the eventual target of 5%”.
While rating agencies are not everyone’s favourite‚ they do have valid points from time to time.
What is the point of having a master plan for economic growth but then be very slow in implementing it?
The government needs to identify departments‚ especially those focused on economic growth‚ and give them the responsibility of implementing the NDP.
Having fewer and specialised departments to handle the plan would make implementation quicker and monitoring easier and more efficient.
Data coming out tomorrow is expected to show a slowdown in activity in the manufacturing sector. The Kagiso purchasing managers index (PMI) is expected to have fallen to about 51 or 52 last month after rising to 54.2 in January from 50.2 in December.
A reading of above 50 represents manufacturing activity expansion.
Investec economists said the binding constraints on production imposed by national rolling power outages will be evident in the Kagiso PMI for last month.
They added that the external demand environment was also a suppressing factor on faster production growth.
The figures for electricity generated‚ to be released by Statistics SA on Thursday‚ are expected to show the extent of load-shedding‚ which intensified last month.
HSBC will release its PMI on the South African economy tomorrow and it is also unlikely to inspire any confidence.
The seasonally adjusted Markit-HSBC SA PMI fell to 49.8 in January from 50.2 in December‚ showing a deterioration in companies’ operating conditions at the start of the year‚ HSBC says.
Companies are blamed for losing confidence given the power outages‚ continuous downward revisions to economic growth forecasts‚ and “often confusing and ambiguous” legislative proposals‚ as one economist once put it.
The US economy growing less than forecast is a negative development for South Africa as it will hurt demand for local exports.
SA still needs capital inflows to finance the large deficit on its current account‚ although lower oil prices are expected to help narrow this shortfall.
So far the country has done very well in attracting capital despite all its challenges. — BDLive
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