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| patrick Buthelezi - Friday 15 February 2008 |
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| The year of 2008 will be the worse year. As for the reason that is highly debatable but expecting any household tax relief would be unrealistic expectations given the move by monetary authorities to tame spiral consumer demand by hiking rates. The medium term budget presented last year was clear that government was planning to keep a small surplus. But, what has happened on the inflation front, consumer income has been eroded and moderating growth would have an impact on employment which would further exert upward pressure on consumer demand which normally anchors South African economy. The windfall in government revenues is more likely to slow this year as business cycle approaches slow down. The electricity crisis is another course for concerned as it would limit production in different sectors especially those sectors that are energy intensive would be hits hard. This includes mining, clothing and manufacturing, however given the recent changes in economic structure this would not be a train smash for economic growth because services sector which is playing a dominant role in GDP are less heavy on energy suggesting electricity crisis would affects all sectors. Overall, 2008 will be year every one will wish to forget. |
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