The July edition of the Reuters South African Survey of Economists has just been published. (The Reuters Econometer is a measure of economic sentiment drawn from a monthly poll of forecasts by leading economists in South Africa and abroad and presented in the form an index). The weightings used in the index are: GDP growth – 25%; CPIX inflation – 20%; Producer Price Inflation – 5%; Prime Interest Rate – 20%; 10-year bond yield – 5%; Rand-Dollar Depreciation – 25%.
After falling in June, the July Econometer edged up to 248,17 on the back of expectation for a mild economic recovery next year as w ell as low er inflation. The economy is still expected to contract this year by an average -1,8%, how ever sentiment has improved for a better recovery in 2010 and 2011. Contributing to the improved outlook is the impact of the Soccer World Cup and the recovery in consumer demand due to the effects of the interest rates cuts. Inflation is still expected to fall within the target band by Q2 2010. CPI how ever, is seen averaging 7,26% this year compared to 7,33% in the June survey. Weak local demand and extra capacity has contributed to the low er inflation outlook. Although the rand is a bit of an unknow n, the rand is seen strengthening this year to an average R8,43/$, compared to R8,53/$ expected in the June survey
The “August” survey w ill be published 3 September 2009.
Please click the thumbnail below for the full report.
Source: Sasfin, July 2009.
