South Africa

Tuesday, October 27, 2009

Business Index Points to Country Beating Recession This Year (allAfrica)

Johannesburg — SA’s leading business cycle indicator has risen for the fifth month running, boosting expectations that the economy will emerge from recession in the fourth quarter.

The composite leading indicator climbed a robust 2,1% in August to 112,5 from 110,1 in July, although the level is still 3,5% below the 116,6 reported in August last year.

The indicator — compiled by the Reserve Bank with data from surveys, share prices and SA’s main trading partners — predicts trends in the economy in the next six to 12 months.

SA’s emergence out of recession will come as a relief to the government which is already facing an estimated R70bn revenue shortfall and has to borrow to finance its medium-term budget policy statement (MTBPS), which is being released today. The MTBPS maps out government spending and revenue plans over the next three years.