Simon Segal
COMPARED to our survey at the beginning of the year,=20 South Africa’s major economic forecasters have slightly=20 scaled down their economic growth forecasts.=20
On average, the 10 forecasting units now expect gross=20 domestic product (GDP) to grow 2,9 percent this year=20 and 3,3 percent next year. GDP estimates at the=20 beginning of the year averaged 3,1 percent for 1995 and=20 3,32 percent for 1996.
GDP grew 2,3 percent last year and 1,1 percent in 1993.=20 So, by consensus, South Africa is still on track for=20 four consecutive years of economic growth for the first=20 time since the 1970s.
The most optimistic unit is Old Mutual which expects=20 growth rates=20
of 3,3 percent and four percent this year and next=20 respectively. Most pessimistic is Amalgamated Banks of=20 South Africa (Absa) (2,5 and two percent).=20
Six units expect the economy to gain momentum next year=20 and two (Frankel Pollak and Absa) expect it to lose=20 steam. The remaining two, Sanlam and the Afrikanse=20 Handelsinstituut, forecast the same growth for 1995 and=20
Frankel Pollak and Absa are thus the only two units=20 which expect the deficit on the current account of the=20 balance of payments to fall next year.
The most dramatic turnaround in the forecasts is with=20 the current account. An average deficit of R7,5-billion=20 and R8,7-billion is pencilled in for 1995 and 1996=20 respectively, compared to a shortfall of R4,2-billion=20 and R6,3-billion estimated at the beginning of the=20
Deficit projections for this year range from the South=20 African Chamber of Business’ (Sacob) R5-billion to=20 Sanlam’s R10-billion. For next year the spread is R5,5- billion (Frankel Pollak) to R12-billion (Sanlam).
All units except Sacob expect an inflation rate of 10,5=20 to 12,2 percent both this year and next. Sacob is=20 looking at nine percent this year and 8,5 percent next.
On interest rates, seven of the 10 units expect a=20 percentage point increase in prime rate (at present=20 17,5 percent) this year and six of them see a further=20 percentage point rise by the end of next year. Only=20 Sacob expects interest rates to start falling next=20
If Old Mutual and Frankel Pollak are right, prime rate=20 will reach 20,5 percent next year.