South African Reserve Bank Governor Tito Mboweni said on Thursday that while there were some tentative indications of a slowdown in consumption, such as vehicle sales, it is still “early days”.
“One month’s number is insufficient to make decisive conclusions,” he added.
Mboweni also pointed out that while the current account deficit was being adequately financed by financial inflows, there might be inflationary pressures in the future if the deficit widened.
However, he said he fully supports the infrastructure spending programme.
“It is the kind of programme I fully support. We need infrastructure spending.”
“We must finance it responsibly. I think we are,” he said.
“I hope Eskom doesn’t increase prices by 18% as it feeds into administered prices,” said Mboweni.
Mboweni also mentioned that there was a huge amount of concern over the United States subprime crisis and that if there was not an ordinary unwinding there might be some financial difficulties. He concluded that there is a bigger responsibility for regulators in this environment. – I-Net Bridge