NATIONAL ASSEMBLY : 29th May 2008
 

There is an old saying: It never rains, but it pours! It seems to me that this saying can be applied to the two pieces of very bad economic news we have had in the last two days.

First, we heard that first quarter economic growth has dropped sharply to only 2,1% on the back of sharp slowdowns in mining and manufacturing due to power supply problems. This is the lowest growth rate we have had for 6 and a half years and contrasts sharply with the 5,3% rate in the last quarter of 2007.

Second, yesterday STATS SA informed us that CPIX had reached 10,4%, while headline inflation has climbed to 11,1%. In doing so, the Reserve Bank's inflation target has been breached for the 13th month in a row, prompting the Governor to threaten a 2% increase in the repo rate.

Add all of this bad news to the already high fuel price and high food prices, and the picture for SA Inc. looks very bleak.

All we can do is ask the Hon Minister of Finance - "WHAT NEXT!"