Persistently high oil prices could cause higher inflationary expectations to become more entrenched, thus increasing the probability of a further tightening of monetary policy, said South African Reserve Bank (SARB) Governor Tito Mboweni on Friday morning.
Growth in electricity consumption in South Africa has continued to increase in line with higher electricity imports, with the amount by which exports exceed imports dwindling as a result, economic analysts said on Thursday. Both the year-on-year consumption and production of electricity rose in March.
While South Africa’s trade deficit widened further in March, there are continuing signs of improved export performance, analysts said on Monday. According to the South African Revenue Service on Monday, South Africa’s trade deficit widened by a further R2,75-billion in March, similar to February’s deficit of R2,66-billion.
South Africa’s latest pricing reports point to sustained inflation pressures and the risk of higher interest rates in 2007, according to international analysts <i>Moody’s Economy.com</i>. "Worryingly, core inflation, which excludes the price of certain foods, jumped to 4,9% year-on-year in March from 3,9% the month prior," it says.
After substantial revisions to South Africa’s quarterly employment data, the country’s economy is "at least" R110-billion larger than originally thought, a leading economist says. "It is 90% or more likely that the economy will increase by at least R110-billion, which amounts to around a 6,5% change," says T-Sec economist Mike Schussler.
While South African bonds have strengthened marginally during the past week, market analysts say further strength is "unlikely" as the market awaits the outcome of Thursday’s key rates decision. Bonds strengthened marginally on the week, with the yields on both the R153 and R157 government bonds falling by seven basis points.
While electricity consumption in South Africa continues to grow strongly, growth in production has ultimately been constrained by capacity problems, analysts said on Tuesday. February’s year-on-year growth in electricity consumption was unchanged from January’s growth at 5,1%.
The deterioration of South Africa’s national savings ratio to 13,75% of gross domestic product in the fourth quarter of 2006 has brought the annual savings ratio to an historic low of 14% in 2006, South African Reserve Bank (SARB) data showed on Thursday.
Household credit extension by banks is up 81% between January 2004 and September 2006 to R680-billion, a report mandated by the National Credit Regulator (NCR) has found. Gabriel Davel, CEO of the NCR, notes that there are indications of important changes in the credit market behaviour.
Nominal house-price growth of 15,4% year-on-year was recorded in February from a revised 15,4% in January, according to the latest Absa house-price index. This brings the average price of a house in the survey to R891 700 in February this year. However, the researchers pointed to growth potentially levelling off again later in the year.