High oil prices and the United States deficit of $800-billion were key reasons for the large sell-off that occurred on the stock markets last week, South African Finance Minister Trevor Manuel said on Monday.
Addressing a media breakfast in Cape Town — ahead of his Budget vote in the National Assembly — he referred to the “yawning, gaping” $800-billion deficit and the rapid rise in the oil price which had been $11 a barrel “a few years ago” and was now standing “on the other side” of $70 a barrel.
These were among a series of issues “that will continually mark the times we live in”, he said, adding that if one looked at the stock markets over the last fortnight, they told the story of “the speed of change”.
Country after country in the developing world saw “huge sell-offs”, he noted — with Pakistan losing 11,3%. South Africa was down 3,2% but rose around 2,9%.
“You are going to have these kind of corrections,” he said. – I-Net Bridge