South Africa is not moving into a recession, Jeremy Gardiner, director at Investec Asset Management, said on Thursday at a media briefing in Johannesburg.
”We tend to agree with what the Treasury has said on the matter. Yes, consumers will continue to be under pressure and growth is slowing, but we are not heading into a recession,” he said, confirming the definition of a recession as two consecutive quarters of negative growth.
He said it needs to be emphasised that what is happening in the South African economy now is a global phenomenon.
”South Africans tend to beat themselves up — we mustn’t forget that there’s a financial crisis worldwide.”
And the present economic environment is a normal phase of the business cycle, Gardiner said. ”We can’t expect year after year that things will be good. We’ve had four to five fabulous years.”
Growth on the African continent, however, appears to be at just above 5% — if Zimbabwe is ignored, Gardiner said.
”The Southern African investment climate would be so much better if we could fix Zimbabwe.”
Generally, Investec is positive about Africa — ”because we have an Asian invasion going on — and Asia understands Africa”, said Gardiner.
He said that South African investors — in the present climate — will probably go overweight in commodities, or some might go into cash.
”The risk, however, is in being out of the market when it starts trending up,” said Gardiner.
”By the time it feels comfortable to invest again, it may no longer be profitable.”
Gardiner said that the market has priced in a lot of the present negativity. ”As 2009 dawns, we should see some of the negatives turn to positives,” he said. — Sapa