SA’s economy recovery promises growth and job creation

By: Thandisizwe Mgudlwa- AfricanBrains 

While the world’s superpower the US, and most European countries and other region’s economies find it hard to recover from the recent financial crisis, South Africa is singing a different tune. At least that’s what research institutions are saying.

It is also expected that should the economy get back on it’s feet, jobs will be created.

In the past, economic development has failed to deliver much needed employment, with millions remaining marginalised. It is nearly 20 years since the African National Congress government came to power, after the country’s historical first democratic elections in 1994.

Although strides have been made to level the playing field for black South Africans, their white counterparts still enjoy disproportionate access to opportunities and privileges. Particularly in gaining employment.

Since coming into office in 2009, the current Zuma Administration is investing a lot of time and effort on a new growth path, seeking to uplift the many who are still impoverished. It looks set that real change is around the corner.

Studies show that the 18 year young democracy’s economic prospects continue to improve in the wake of the recent economic recessions.

This development could directly be attributed to trade with dynamic emerging economies, particularly China , India and Brazil that continue to fuel global growth.

And SA’s partnerships with the likes of India, Brazil, South Africa (IBSA) and the Brazil, Russia, India, China, South Africa (BRICS) groups could prove vital for Africa’s most powerful economy’s vision to provide economic liberation to it’s poor masses.

These groups are also predicting that SA’s economy will continue to recover, however this improvement is expected to be gradual over the next three to five years.

Also revealed is that one of the recovery factors is Growth Domestic Product having shown an increase in the fourth quarter of 2011, coming in at 3,2% quarter-on-quarter at a seasonally adjusted annual rate.

All this happened on the back of a weaker, still-recovering year for the country in 2010.

Coface South Africa (CSA) is projecting a GDP growth of 2,8 percent in 2012 and 4,4 percent GDP growth in 2013.

“Consumer spending proved remarkably resilient in 2011 and was particularly so in the fourth quarter of 2011. This was reflected in the sterling performance of the wholesale, retail and motor trade sectors.

Statistics show an increase in output by eight out of ten sub-sectors of manufacturing for February 2012, which  is well above expectations.

“There was also a strong improvement in employment for this sector. January 2012 saw CPI inflation increase marginally to 6,3% from 6,1% year-on-year,” Stats SA explains.

However, CSA expects inflation to remain around 6,0% for the remainder of 2012.

“This means it is unlikely for the South African Reserve Bank (SARB) to change interest rates for the year and because there is still market pressure emanating from the week Europen economy.

“Due to weak demand from the Eurozone, it could mean that export growth will slow, but it is currently being kept strong by a weaker rand and increasing fixed investments,” official explains.

Furthermore, in 2011 exports increased 21% while imports rose 36% compared to 2010.

This has shown there is stabilisation in export momentum, but also a rise in import growth.

CSA anticipates that consumer expenditure figures, reflected in the Quarterly bulletin, will continue to be robust.

“Although GDP growth is expected to be marginal, industrial markets will show decreased growth especially in the manufacturing sector.

“Only very few manufacturing concerns will show marginal growth,” the study asserts.