2010: Better, not brilliant

President Jacob Zuma and Western Cape Premier Helen Zille are seen during a visit to Green-point Stadium.

While South Africa is likely to have experienced the deepest decline since 1966 when the current down cycle is finished, the worst may have passed, said a leading economist on Friday.

 

Chief economist of Economists.co.za, Mike Schussler, told the National Consumer Forum in Midrand on Friday that "the economy does move in cycles and I think we are on our way back". But he added: "2010 will be better, but it won’t be brilliant  it will be slow but better, but 2011 should be much closer to a normal year."

 

"Certainly in my mind the worst was April and May and it may last to September, but we are probably over the biggest decline and will see smaller declines and then slowly start seeing some increases," said Schussler.

 

He foresees an average prime rate of 12 percent in SA over the next five years, "as long as the inflation rate is below that".

  

He sees nominal wage increases of around eight percent and prime declining to around 10.5 percent from 11 percent now in the current cycle.

 

But he feels house prices in SA will become cheaper. "Those with houses be prepared  SA house prices are still high."

 

Source: AHU – Gyula Balázs Kisvárdai

 

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