South Africa's Economy 'likely To Grow By 2.8%'

19 Jan 2013

SOUTH Africa’s economy is likely to grow by 2.8% this year, mainly supported by exports, but a large unemployment problem will remain, Absa Investments general manager Craig Pheiffer said at the group’s briefing on Thursday.

This is slightly below the Reserve Bank’s forecast for growth this year to average 2.9%.

Statistics SA is yet to release last year’s economic growth figures, but forecasts are for a growth rate of 2.5% from 3.1% in 2011.

The weaker rand is expected to be a positive for exports, while imports are expected to decline.

Mr Pheiffer forecast the consumer price index (CPI) to breach the top end of the Reserve Bank’s 3% to 6% target band in the second quarter of the year on higher costs such as energy, food and fuel.

He said December inflation — due next week — was likely to have increased to 5.7% year on year from 5.6% year on year in November.

"CPI is still going to be under pressure," Mr Pheiffer said.

Absa Investments expected the repo rate to remain on hold at 5% for the whole year.

The Reserve Bank’s monetary policy committee will hold its first meeting of the year next week, with interest rates widely expected to be kept unchanged.

Source: http://www.bdlive.co.za/economy/2013/01/17/south-africas-economy-likely-to-grow-by-2.8