Meta tags:

Headings (most frequently used words):

south, africa, 2008, edward, in, august, african, september, blog, economics, economy, facebook, 23, friday, page, emerging, blogs, claus, links, about, continues, rand, slows, july, watch, blogging, monday, january, 17, 2011, sunday, 2009, tuesday, 12, thursday, 29, hugh, rss, feed, home, markets, economies, our, personal, and, baker, dozen, global, latin, america, asia, eastern, europe, eurozone, demography, special, mention, catalan, website, think, tanks, mail, site, stats, archive, blues, recession, even, as, the, surges, inflation, rises, again, manufacturing, output, decline, current, account, deficit, slightly, lower, q2, mortgage, growth, trade, gap, widens,

Text of the page (most frequently used words):
the (680), and (201), south (98), percent (91), #economy (70), for (64), from (64), africa (62), that (60), quarter (53), has (51), rand (50), this (48), growth (47), year (46), which (43), 2009 (42), with (42), are (40), watch (39), was (39), 2008 (38), african (38), rate (38), per (36), bank (34), cent (33), since (32), billion (29), first (29), inflation (29), its (28), economic (26), more (26), have (26), prices (26), last (25), manufacturing (25), deficit (24), been (24), interest (23), global (22), country (22), second (22), current (21), but (21), edward (20), now (20), will (20), july (20), economics (19), emerging (19), may (19), currency (19), about (18), also (18), june (18), government (18), month (18), sales (18), not (17), according (17), annual (17), rates (17), market (16), central (16), they (16), over (16), level (16), economies (15), between (15), dollar (15), years (15), recession (15), august (14), can (14), markets (14), their (14), were (14), than (14), sector (14), blog (13), one (13), most (13), income (13), data (13), exports (13), real (13), compared (13), debt (13), policy (12), monetary (12), hugh (12), all (12), would (12), what (12), some (12), high (12), while (12), increase (12), biggest (12), fell (12), decline (12), months (12), further (12), still (12), unemployment (12), trade (11), fact (11), going (11), countries (11), against (11), much (11), world (11), back (11), gdp (11), after (11), output (11), down (11), problem (11), recovery (11), account (10), reserve (10), investment (10), price (10), half (10), spending (10), three (10), 2010 (10), demand (10), continued (10), there (10), retail (10), these (10), other (10), december (10), capital (10), far (9), into (9), who (9), during (9), increased (9), million (9), drop (9), dropped (9), power (9), export (9), week (9), likely (9), part (9), seen (9), measures (9), household (9), result (9), march (9), total (9), should (9), new (8), finance (8), when (8), performance (8), see (8), time (8), comments (8), domestic (8), said (8), mortgage (8), slowed (8), fourth (8), fund (8), rose (8), higher (8), consumer (8), third (8), falling (8), rise (8), term (8), expected (8), activity (8), credit (8), advances (8), main (8), statistics (7), working (7), population (7), again (7), matters (7), claus (7), point (7), brazil (7), like (7), out (7), short (7), posted (7), close (7), due (7), house (7), rising (7), electricity (7), consecutive (7), annualized (7), inflows (7), two (7), value (7), production (7), declined (7), slowdown (7), very (7), mining (7), fiscal (7), driven (7), fall (7), negative (7), liquidity (7), flows (7), levels (7), cpi (7), january (6), oecd (6), risk (6), business (6), china (6), group (6), both (6), number (6), financial (6), those (6), long (6), way (6), same (6), could (6), being (6), costs (6), revenue (6), 2007 (6), foreign (6), low (6), next (6), gold (6), platinum (6), coal (6), average (6), adjusted (6), previous (6), increasing (6), slow (6), following (6), steadily (6), recent (6), had (6), employment (6), many (6), contraction (6), did (6), goods (6), loans (6), however (6), labour (6), work (6), 000 (6), such (6), rather (6), even (6), only (6), net (5), links (5), emerginvest (5), based (5), demographic (5), demography (5), currently (5), india (5), turkey (5), europe (5), although (5), money (5), relatively (5), developed (5), known (5), found (5), facebook (5), record (5), import (5), needs (5), product (5), johannesburg (5), estimates (5), imports (5), friday (5), november (5), above (5), investors (5), fallen (5), slightly (5), lower (5), food (5), times (5), lowest (5), important (5), almost (5), declining (5), sentiment (5), index (5), continues (5), present (5), unlikely (5), evidently (5), growing (5), strong (5), private (5), disposable (5), given (5), twelve (5), april (5), contracted (5), people (5), large (5), job (5), public (5), then (5), sharp (5), another (5), around (5), improved (5), zar (5), major (5), take (5), example (5), sustainable (5), september (4), 2011 (4), european (4), edirc (4), international (4), blogs (4), research (4), development (4), banks (4), view (4), his (4), trying (4), impact (4), often (4), home (4), lead (4), especially (4), how (4), national (4), macro (4), key (4), through (4), our (4), move (4), need (4), increasingly (4), behind (4), across (4), baker (4), dozen (4), hand (4), measure (4), basis (4), widened (4), oil (4), service (4), reached (4), october (4), needed (4), gross (4), mainly (4), surge (4), revised (4), eased (4), began (4), period (4), benchmark (4), six (4), forecast (4), significantly (4), late (4), weakening (4), commodity (4), risen (4), points (4), cpix (4), percentage (4), target (4), range (4), increases (4), better (4), consumption (4), industry (4), minus (4), slump (4), decelerated (4), favourable (4), age (4), pressure (4), chart (4), below (4), jobs (4), course (4), discouraged (4), workers (4), end (4), imf (4), borrowing (4), remains (4), zero (4), surprise (4), among (4), good (4), closely (4), thus (4), best (4), carry (4), currencies (4), construction (4), potential (4), case (4), think (3), web (3), resources (3), economists (3), papers (3), future (3), economist (3), macroeconomist (3), whether (3), you (3), book (3), alpha (3), issues (3), japan (3), start (3), methodology (3), order (3), terms (3), effective (3), underlying (3), benefit (3), help (3), posts (3), severe (3), lost (3), indonesia (3), today (3), boosted (3), infrastructure (3), services (3), absa (3), pace (3), middle (3), narrowed (3), outages (3), five (3), assets (3), recorded (3), inflow (3), estimated (3), dropping (3), accounts (3), earlier (3), seasonally (3), vehicle (3), manufactured (3), products (3), recently (3), report (3), day (3), reflecting (3), confidence (3), repurchase (3), make (3), annualised (3), saar (3), largely (3), serious (3), figure (3), consensus (3), reduce (3), bad (3), processes (3), where (3), find (3), moved (3), substantial (3), question (3), return (3), reflected (3), weak (3), trend (3), side (3), suggest (3), february (3), balance (3), minister (3), wage (3), set (3), risks (3), kind (3), play (3), relative (3), exchange (3), requirements (3), banking (3), positive (3), extended (3), deceleration (3), cumulative (3), effect (3), equity (3), facing (3), chinese (3), concerned (3), might (3), capacity (3), either (3), treasury (3), yields (3), sovereign (3), excluding (3), size (3), something (3), seems (3), globe (3), near (3), making (3), remained (3), pmis (3), well (3), comes (3), sectors (3), prospects (3), crisis (3), happening (3), must (3), sharply (3), them (3), reserves (3), controls (3), blues (2), site (2), mail (2), roubini (2), centre (2), statistical (2), 2006 (2), network (2), department (2), calls (2), investor (2), econbrowser (2), big (2), picture (2), brad (2), catalan (2), bonobo (2), changes (2), him (2), ask (2), right (2), matter (2), fistful (2), euros (2), seeking (2), vistesen (2), old (2), finishing (2), local (2), ultimately (2), takes (2), develop (2), regular (2), contributor (2), eurozone (2), indian (2), philippines (2), asia (2), chile (2), analysts (2), used (2), identify (2), indicators (2), confirm (2), connection (2), community (2), towards (2), direct (2), wealth (2), imbalances (2), older (2), type (2), win (2), source (2), 13th (2), called (2), punishment (2), give (2), certain (2), intended (2), prevent (2), personal (2), thailand (2), page (2), debate (2), boosting (2), shortfall (2), climbed (2), weakened (2), concern (2), struggle (2), before (2), trading (2), 568 (2), plants (2), roads (2), stadiums (2), fifa (2), cup (2), equipment (2), imported (2), plunged (2), lender (2), 500 (2), sixth (2), monthly (2), slows (2), shrank (2), pretoria (2), supply (2), forced (2), days (2), rebound (2), stocks (2), portfolio (2), outflow (2), past (2), road (2), rail (2), expects (2), beverages (2), considerably (2), suggests (2), rebounded (2), slowing (2), aug (2), 2003 (2), quarterly (2), published (2), hit (2), office (2), rises (2), actual (2), energy (2), agriculture (2), disappointment (2), easing (2), stimulus (2), influence (2), line (2), rbsa (2), meeting (2), forward (2), downside (2), 2005 (2), mid (2), single (2), supported (2), effects (2), asset (2), until (2), final (2), little (2), changed (2), inventory (2), 100 (2), probably (2), declines (2), situation (2), falls (2), young (2), enter (2), nearly (2), actually (2), less (2), wonder (2), administration (2), deterioration (2), contract (2), standard (2), formal (2), losses (2), cycle (2), conditions (2), affected (2), least (2), jpmorgan (2), budget (2), surplus (2), tax (2), collection (2), sonja (2), keller (2), miss (2), statement (2), look (2), expenditure (2), four (2), households (2), structural (2), distortion (2), produced (2), related (2), producing (2), position (2), previously (2), thought (2), strain (2), categories (2), lending (2), consequence (2), outlook (2), introduced (2), vigour (2), recover (2), quickly (2), wide (2), widening (2), naturally (2), volume (2), decrease (2), experienced (2), patel (2), productive (2), simply (2), ago (2), enough (2), pretty (2), certainly (2), simon (2), unexpectedly (2), 10y (2), targeted (2), urban (2), areas (2), fuel (2), petrol (2), headline (2), marginally (2), problems (2), running (2), upward (2), lowered (2), decision (2), dilema (2), here (2), struggles (2), text (2), definitely (2), attracting (2), expectation (2), appreciation (2), despite (2), fundamentals (2), appetite (2), yielding (2), bloomberg (2), perception (2), white (2), put (2), derivative (2), turned (2), pmi (2), troughs (2), system (2), latest (2), accelerated (2), ratio (2), additional (2), comparatively (2), reasons (2), early (2), economically (2), shortages (2), tightening (2), clearly (2), expanded (2), started (2), perhaps (2), proper (2), excessively (2), ability (2), any (2), reason (2), reliance (2), modern (2), globalised (2), everything (2), news (2), gauteng (2), reported (2), damage (2), australian (2), get (2), vis (2), director (2), developing (2), medium (2), top (2), struggling (2), attracted (2), appreciate (2), nine (2), effort (2), housing (2), reducing (2), really (2), cannot (2), without (2), build (2), longer (2), caroline (2), atkinson (2), prudential (2), unorthodox (2), strengthen (2), creation (2), particularly (2), focused (2), updates (2), sidebar (2), skip (2), archive, stats, breugel, biceps, monitor, morgan, stanley, forum, studies, tanks, webec, millenium, project, offices, sosig, gateway, bill, goffe, official, information, factbook, nep, nber, lecture, notes, online, fed, print, frbsf, roundtable, ssrn, departments, institutes, centers, rankings, econphd, associations, societies, econpapers, ecological, encyclopaedia, earth, institute, weblogs, sustainability, analysis, profiles, conferences, rfe, conference, inomics, chicago, authorities, conservation, pienso, greg, mankiw, aplia, econ, tufte, classes, econtech, prudent, cynic, delight, stumbling, mumbling, angry, bear, general, glut, calculated, william, polley, dreams, unbound, skeptical, speculator, neuronomics, atanu, dey, nouriel, delong, mainpage, website, cafè, república, sucursal, putxet, demographer, british, extraction, barcelona, inclination, deep, seated, obsession, understand, contemporary, taken, off, away, tranquil, placid, pastures, dismal, science, bracken, thicket, anthropology, biology, sociology, systems, theory, himself, thomas, wolfe, asserted, never, provisional, title, ultimate, non, renewable, resource, writes, rge, econmonitor, msc, applied, copenhagen, school, primary, interests, macroeconomics, interested, changing, structure, demographics, impacts, macroeconomic, moreover, wonk, considerable, methodologies, associated, econometrics, intends, postgraduate, evening, distribution, setser, macroman, electoral, panorama, special, mention, spain, italy, greece, german, french, ukraine, russia, romania, poland, latvia, hungary, czech, baltic, eastern, argentina, latin, america, proud, happy, announce, featured, boston, updated, consider, outperform, rest, 2020, horizon, association, hope, relevance, validity, selection, procedure, adopted, absolutely, whatsoever, heartily, endorse, particular, ways, address, inter, plagued, planet, namely, getting, rich, poor, sending, addressing, exist, populations, save, younger, savings, ensure, your, own, pension, attack, poverty, possibility, normally, theoretical, background, choice, oldest, probable, origin, expression, dates, century, earliest, english, statutes, instituted, reign, henry, iii, 1216, 1272, assize, bread, ale, bakers, shortchanged, customers, liable, guard, losing, axe, cheat, specifically, practice, baking, items, eaten, burnt, ruined, leaving, original, land, sources, peru, morocco, kazakhstan, egypt, albania, rss, feed, subscribe, atom, surged, 200, crude, 145, barrel, york, attract, 728, 674, released, prepares, host, jumped, offset, gap, widens, slowest, 1993, curbed, 962, 122, 294, segment, 1992, stabilized, mines, shut, enabling, gained, stepped, keeping, 164, 194, relies, bonds, dry, sold, riskier, preparation, hosting, program, reach, volumes, helped, boost, 682, 760, thursday, damp, textile, clothing, raised, largest, left, unchanged, begin, lowering, clear, signs, slipped, publication, slumped, droppedat, 3322, touching, weakestlevel, 3258, produces, moves, tandem, movement, constant, marking, eighth, survey, merchant, yesterday, 2001, reaching, excludes, soared, within, hurt, separate, fifth, probability, tuesday, represents, shrinkage, comparted, improvement, manily, expansionary, accommodative, become, colloquially, green, shoots, decisions, foward, broadly, expectations, effectively, factored, surprises, weakness, potentially, strengthening, digits, robust, downwardly, appears, throes, stockpiles, rundown, iron, steel, automotive, petroleum, chemicals, miniscule, setween, showing, wuth, surprisingly, environment, ltd, nominal, 925, 115, 548, gaining, instalment, sale, leasing, noticeably, showed, motor, vehicles, durable, fertility, mdeian, ranges, creates, reap, benefits, dividend, dependent, process, puts, enormous, looking, 375, lot, sideways, protracted, putting, calling, president, jacob, zuma, pledge, create, opportunities, programs, labor, weighed, deteriorated, quality, slowly, creit, squeeze, expect, nearer, anticipates, totalling, 400, depending, duration, hamper, trennds, knock, soft, aggravate, bonus, payments, operating, hours, property, endure, double, projection, chase, 183, cover, outlined, confirmed, she, wrote, bringing, row, owing, efforts, including, obligations, enterprises, governments, 643, forecasting, shrink, confirmation, her, pravin, gordhan, admitted, finances, come, settlements, civil, servants, push, budgeted, 738, granted, 125, striking, municipal, dispute, conclusion, tim, overleveraging, context, industrial, geering, subjected, distortions, pricing, factor, critical, contemplating, greenfield, invement, projects, predominantly, taking, bigger, toll, immediate, massive, fave, quarters, exception, comprise, stricter, criteria, deposit, dampen, residential, mortgages, subtantially, ending, pushed, historic, highs, decelerate, partly, deteriorating, restrictive, tighter, stance, mere, 1966, stock, bounced, trough, rally, 6th, renewed, rout, huge, reverted, whole, perennially, primarily, faster, limited, somewhat, composition, looks, healthier, dramatically, 100bn, preceding, destined, severely, exporters, competitiveness, noted, strongly, partner, addition, raw, materials, understandable, r19, r53, similar, magnitude, ebrahim, warned, irreparably, erode, deeply, permanent, factories, parliament, feeds, directly, acount, pinch, gearing, unsurprisingly, fit, citigroup, degree, releases, relationship, serves, emphasise, seductive, wallowing, geared, softening, attitude, prognosis, spreads, cds, approaching, summer, spread, returned, metropolitan, measured, peaked, continuously, drivers, transport, calendar, release, includes, alcoholic, maintenance, repair, utilisation, noteworthy, administered, producer, show, impavt, chemical, contributors, moderation, basically, having, headache, ease, momentum, wary, too, extent, credibility, under, test, cut, reduction, curtail, governor, tito, mboweni, televised, debated, cuts, follow, rapidly, horns, apply, targeting, variety, contain, perverse, drawn, yield, differential, things, swift, reversal, outflows, witnessed, winter, gives, hint, counter, intuitive, performing, impressive, depressed, appreciated, maintaining, weekly, advance, feeling, moving, strengthened, 7474, intraday, jump, 8139, favorite, trades, borrow, invest, returns, offered, monitored, correlated, catalysts, upside, varinat, simpon, territory, bind, broadbased, orders, suppliers, performances, input, lagging, exporting, partners, germany, seven, hitting, respective, provided, steady, mentioned, guaranteed, encouragingly, useful, indicator, seem, markedly, purchasing, managers, reading, grounds, optimism, hoped, gains, suggesting, implying, significant, consolidation, gain, traction, cost, frees, cash, decreased, corresponding, anxiety, security, continuer, sheets, continue, importantly, active, inactive, form, larger, employed, workforce, saw, entered, evolution, preferred, sunstantially, deepening, quarter3, amounted, comparing, stabilise, full, plus, pessimistic, predicted, volatile, healthcare, carried, oriented, wholesale, worse, steep, surprising, 267, explanation, seekers, 302, added, equivalent, calculation, overview, danelee, van, dyke, rejuvenation, depleted, catalyst, bolster, cees, bruggemans, transition, 4q2008, 1h2009, sensitive, analyst, summary, insubstantial, leverage, risky, practices, hallmarks, boom, wrong, comfortable, factors, along, relation, bring, unwelcome, attention, event, precipitated, elsewhere, variant, surges, sunday, ordinary, citizens, ups, downs, characterise, scratching, heads, saturday, read, morning, raise, hell, phenomenon, worst, performer, globally, because, discerning, eye, hard, generally, exposed, eventual, contractions, union, decade, replaced, continent, virtually, connected, else, flooding, tragedy, heels, publicised, australia, catch, eyses, common, thread, events, mind, unfortunately, loss, human, life, involved, dead, kwa, zulu, natal, provinces, wake, xstrata, thermal, exporter, bhp, billiton, delays, deliveries, richards, bay, terminal, rain, halted, trains, hedge, traders, busily, examining, maps, networks, photos, mine, installations, bid, estimate, normal, run, consquences, futures, smoothly, oiled, tightly, meshed, gears, drive, inner, complexity, influencing, trends, bond, won, meets, worried, produce, emerged, contracting, cry, experiencing, benign, keep, loosening, loose, apart, obvious, isn, welcome, roughly, driver, starting, pose, trigger, abrupt, fluctuations, lasting, vountries, words, hans, timmer, pickup, reinforced, heavy, threaten, values, suddenly, bubbles, emerge, justified, busy, blue, chip, highest, 226, limit, volatility, advanced, 753, ones, cases, caused, warranted, extraordinary, disruptive, bulk, malaysia, mexico, traded, tracked, try, stem, 1999, rapid, expansion, cement, buys, crimped, shipments, tool, available, wind, straightforward, intervention, announced, transfer, windfall, buy, dollars, deposits, 614, bought, 404, swap, transactions, drain, overestimated, small, 289, emd, pressing, continuing, faces, quite, living, stardards, lies, finding, hundreds, thousands, desperately, search, worsened, stood, meant, note, inequality, exists, raising, reverse, cyclical, inroads, tackling, require, unleashed, tapping, reservoir, unemployed, severity, bolder, action, enhance, efficiency, made, undertaking, reforms, upswing, profitability, improving, created, inward, base, financed, desired, fdi, makes, funding, vulnerable, shifts, dreaded, yet, linkages, parts, solutions, unsustainable, resulting, excess, exported, heavily, endebted, battle, unthinkable, deployed, indeed, external, relations, armoury, possible, ten, views, thing, heresy, creative, demanding, toolkit, swim, ocean, surrounds, says, asking, ourselves, minimise, structual, suffers, policies, taxed, gets, pay, toolbox, always, fine, don, purposes, use, stronger, nomenclature, indicated, didn, exclude, turkish, orthodoxy, competitivness, pressures, crimp, challenge, monday, lively, enjoyable, publishes, frequent, breaking, receive, join, please, invite, friend, clicking, link, blogging,

Text of the page (random words):
uch measures are unorthodox or not the question we need to ask is rather are they going to strengthen the economy concerned are they going to lead to sustainable employment creation are they going to minimise the level of structual distortion an emerging economy suffers as a result of near zero interest rate policies in the developed world and above all are they going to work posted by edward hugh at 6 20 am no comments sunday august 23 2009 south africa s recession continues even as the rand surges the banking sector in south africa has insubstantial leverage and did not enter in to excessively risky lending practices that were the hallmarks of the credit boom days however south africa s current account deficit remains wide and its ability to service its short term debt is on the wrong side of comfortable these factors along with the size of the banking sector in relation to that of other emerging markets would bring unwelcome attention to the economy in the event of a deterioration of global risk sentiment perhaps precipitated by a sovereign debt crisis elsewhere in the world simon white variant perception summary as was expected by most analysts south africa s gdp shrank in the second quarter of this year at an annualised rate q q saar of 3 over the first quarter which represents an actual seasonally adjusted shrinkage of 0 75 as comparted to the 6 4 rate 1 6 actual seen in the first three months of the year the improvement in gdp was largely due to better performance in mining manufacturing and the energy sector activity declined 2 8 year on year from the 1 3 drop recorded in q1 2009 agriculture was a serious disappointment with a 17 q q saar from a 2 q q saar drop in q1 evidently the pace of decline is easing manily due to expansionary fiscal measures and an increasingly accommodative monetary policy and in part to the impact of what have become colloquially known as global green shoots that is demand stimulus from other countries the figure is unlikely to significantly influence interest rate decisions next going foward as it was broadly in line with consensus expectations and was effectively factored in at the last rbsa monetary policy meeting going forward downside surprises on inflation and continued weakness on real economy could potentially lead the reserve bank to further reduce interest rates the analyst view cees bruggemans first national bank q3 2009 will be a transition quarter between the recession proper 4q2008 and 1h2009 and the recovery proper in gdp growth q4 2009 interest rate sensitive sectors should benefit from the cumulative 500 point interest rate easing since december 2008 18 august 2009 danelee van dyke standard bank the prospects for rejuvenation in depleted inventory levels a catalyst for a rebound in production should bolster the economy s growth potential in the second half of the year 18 august 2009 overview south africa s economic performance has steadily been strengthening recent years with real gdp growing at an annual average rate of 4 6 percent in the years between 2005 and 2008 inflation had declined to mid single digits and employment had been growing steadily growth in recent years has been driven by strong domestic demand with private consumption and investment spending supported by robust consumer and business sentiment household consumption was also boosted by growing disposable income rising employment and wealth effects from rising asset prices until late 2007 however 2008 saw a slowdown in activity reflecting the cumulative impact of electricity power shortages the global slowdown and a policy of monetary tightening real gdp growth slowed to 3 percent as the country entered recession the deceleration in the pace of growth is clearly seen in the in the evolution of the reserve banks preferred measure of money supply m3 see chart below which comes from the rbsa with increases slowing sunstantially after q4 2007 but with the slowdown clearly deepening in early 2009 twelve month growth in m3 decelerated from 14 8 per cent in december 2008 to 10 6 per cent in march 2009 and further to 8 5 per cent in april on a quarter to quarter3 basis m3 growth amounted to 4 1 per cent in the first quarter of 2009 down from 15 1 per cent in the fourth quarter of 2008 comparing this year s first half with that of last year the economy is down only 2 it is expected to stabilise next quarter and move back into growth by the fourth quarter making it unlikely that the full year decline will be as bad as the 2 plus that more pessimistic economists had predicted excluding the volatile agriculture and mining sectors the economy actually improved by as much as four percentage points to minus 2 4 in the second quarter from minus 6 2 in the first quarter construction government and personal services such as healthcare carried what growth there was and export oriented sectors of mining and manufacturing did better than in the previous quarter but the big disappointment was the retail and wholesale trade sector which did far worse than expected and the decline accelerated to 4 5 in the second quarter from 2 5 in the first the manufacturing sector continued to contract in the second quarter but the 10 9 drop should be seen against the first quarter s steep slump of 22 the financial sector also contracted again by about 2 5 mining expanded 5 5 after the first quarter s 32 fall as it started to benefit from better commodity prices unemployment continues to be a major problem south africa s unemployment rate increased very slightly to 23 6 in the second quarter from 23 5 in the first quarter of 2009 what is perhaps surprising is that this was despite the fact that 267 000 lost their jobs during the quarter part of the explanation for this is that the number of discouraged work seekers rose by 302 000 had that number been added to the unemployment total the result would have been an unemployment rate of more like 29 7 compared to an equivalent calculation of 28 4 in q1 2009 most importantly the latest rise takes the total number of discouraged workers to 1 5 million from 1 1 million in q2 2008 as a result the number of people who are not economically active in the working age range increased to 13 58 million from 12 86 million in q2 2008 with the consequence that the economically inactive population of which discouraged workers form 11 2 is currently larger the employed workforce and almost one and a half times the size of those in formal employment retail sales continue to fall price adjusted retail sales decreased in june by an annual 6 7 following a 4 4 drop in may for the three months to june sales contracted by 6 relative to the corresponding period a year earlier anxiety about job security comparatively high levels of household debt still high inflation which is still relatively high and a low level of consumer confidence are the likely reasons for the negative growth in real retail sales and this may well continuer for most of 2009 ultimately declining interest rates lower inflation and improved household balance sheets should see a recovery in retail sales in early 2010 the household debt to disposable income ratio continued to rise in the first three months of the year if only marginally to 76 7 from 76 3 in the last quarter of 2008 implying that financial strain on households remained significant debt consolidation should gain traction during the second half of the year when the debt service cost to income ratio falls to around 8 from its current level of 10 9 at the same time as lower inflation frees up some additional cash in the household sector while manufacturing struggles although the final result was not as bad as many expected manufacturing production still fell by an annual 17 1 in june little changed from the downwardly revised 17 2 contraction in may south african industry still appears to be in the throes of an inventory stockpiles rundown iron and steel were down 24 3 the automotive sector 32 8 and petroleum and chemicals were down 14 7 output did increase by a miniscule 0 1 seasonally adjusted setween may and june but more to the point the rate of contraction in production did slow down significantly in the second quarter showing minus 3 q q s a as compared wuth minus 6 9 q q s a in q1 encouragingly electricity consumption often a useful indicator of economic activity rose in june by 1 over may s a and by 2 9 s a in q2 over q1 which would seem to confirm that the recession eased markedly in q2 the latest manufacturing purchasing managers index reading however did not give as much grounds for optimism as might have been hoped for since the pmi weakened in july to 37 3 from 37 9 in june following two consecutive monthly gains suggesting the rate of contraction in manufacturing activity accelerated again even if only slightly the weakening was pretty broadbased with business activity new sales orders suppliers performances and input prices falling in the month in fact south africa s manufacturing pmi seems to be lagging the pmis of the country s major exporting partners us germany japan and uk by two to six months while these economies reached the troughs in their pmis between november 2008 and february 2009 their pmis have rebounded nearly seven times as much as the south africa one since hitting their respective troughs this suggests that by october the decline in production could be over and out of the system provided that is that the slow but steady recovery in the three above mentioned economies continues which is far from guaranteed inflation still a problem the inflation measure targeted by the south african reserve bank until the end of 2008 was the consumer price index excluding mortgage interest costs for metropolitan and other urban areas cpix the year on year inflation rate as measured by cpix peaked at 13 6 per cent in august 2008 and then declined continuously to 10 3 per cent in december according to the central bank the main drivers of inflation during the last quarter of 2008 were food prices fuel and power electricity prices and transport petrol prices average cpix inflation for the calendar year 2008 was 11 3 per cent since the release of the january 2009 cpi data the targeted inflation measure has been the headline cpi cpi for all urban areas this new cpi includes a number of changes of methodology when compared to the previous cpi the year on year cpi inflation rate was 8 1 per cent in january 2009 it then rose to 8 6 per cent in february before declining marginally to 8 5 per cent in march figure 1 inflation in the first quarter of the year was driven mainly by increases in food prices alcoholic beverages household maintenance and repair electricity and in financial services since that time the inflation rate has fallen back slightly from 8 0 per cent in may 2009 to 6 9 per cent in june but given the extended recession and the low levels of capacity utilisation this rate is still noteworthy for its size one of the underlying problems is evidently still the rate of administered price inflation which excluding petrol prices was running at 9 1 per cent in june with electricity prices increasing by 28 6 per cent producer prices on the other hand do show the impavt of the fall in energy prices and the economic slowdown since they declined at a year on year rate of 4 1 per cent in june compared with a decline of 3 0 per cent in may prices of mining and chemical products were the main contributors to this trend but there was also further moderation in food price inflation interest rates in a bind basically having headline cpi inflation still running at 6 9 percent is something of a headache for the central bank since given the recession they would evidently like to ease more which would also help take some of the upward momentum out of the rand but the bank will be wary of going too far given the extent to which its credibility will be under test south africa s central bank unexpectedly cut its benchmark interest rate by half a percentage point the sixth reduction since december to curtail the economy s first recession in 17 years the repurchase rate was lowered to 7 percent governor tito mboweni said in a televised statement after the monetary policy meeting that the decision to reduce rates had been a very closely debated one and it seems unlikely that further rate cuts will follow rapidly carry trade monetary policy dilema the problem is that the central bank is on the horns of a real and very important dilema here as it struggles to apply text book inflation targeting monetary policy in times which are most definitely not of the text book variety one of the issues is that interest rates which are set high to contain inflation can often have the perverse effect of attracting fund flows which are drawn by the yield differential and the expectation of further currency appreciation among other things south africa s is a commodity producing economy and the swift reversal of the fund outflows witnessed last winter see chart below gives some hint that this kind of counter intuitive effect may now be at work in south africa thus south africa s rand despite the current severe recession has in fact been the second best performing currency after brazil across the globe this year but is this impressive performance of the zar supported by the underlying macro fundamentals negative growth depressed confidence and steadily rising unemployment certainly do not make it look like it is the rand appreciated the most in a month against the dollar last week maintaining its first weekly advance since july 24 on the back of consensus feeling the global economy is moving out of recession increasing appetite for high yielding assets on friday august 21 the currency strengthened by as much as 1 9 percent to 7 7474 per dollar its biggest intraday jump since july 20 and best level since aug 4 it was up 1 1 percent at 7 8139 per dollar as of 5 06 p m in johannesburg for an increase of 3 4 percent over the week the rand has now climbed 21 percent against the dollar this year as benchmark interest rates fell to near zero in the u s and europe compared with 7 percent in south africa making the south african currency a favorite for the so called carry trades where investors borrow money in countries with low interest rates to invest in markets with higher returns the rand offered the third best carry trade return of the 16 major currencies monitored by bloomberg last week much of the zar move has been closely correlated with the return of investor risk appetite one of the main catalysts for this has been the upside surprise from us economic data as varinat perception s simpon white put it the second derivative of the data turned positive while the second derivative of the consensus estimates remained in negative territory unsurprisingly as simon points out there is a very good fit between zar and the citigroup us economic surprise index this measures the degree of surprise in the data releases ...