n IMFO : Official Journal of the Institute of Municipal Finance Officers - Is South Africa in a financial crisis? You decide ...




South African economic growth has so far held up reasonably well in the face of the global slowdown. However, the full effect of some moderation in the terms of trade and more uncertain capital inflows is still to be felt. The household sector remains stressed by relatively high debt and the significant rise in interest rates over the past two years. A recovery in agriculture and strong fixed capital formation spending will continue to help the economy avoid recession, but slower growth until the second half of 2009 looks inevitable. Thereafter the expected boost provided by the 2010 FIFA World Cup and some recovery in consumer spending as interest rates moderate should lift growth closer to longer-term potential.


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