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THE LIGHT AT THE END OF THE TUNNEL
Published Date
17 June 2009
Author / Submitted by
Eric S Doms
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Do you want the good news or bad news first? Let’s start with the good news so as to soften the blow when it comes to telling you the bad news.
The Good News
Our April elections were judged to be free and fair, but above all, ‘incident’ free. We were praised internationally of being an example not only to Africa, but to the rest of the world. (Hats off to all)
Our beloved Tito decreased the interest rates by yet another 1%, bringing the prime rate to 12%. It’s forecasted that another 1.5% will be cut before the end of the year thereby making the total decrease since December last year a whopping 3.5%! (We want more, we want more!)
And more than 1.8 million tickets have already been requested for the 2010 Soccer World Cup. Applications came from more than 200 countries with the leading countries being South Africa, USA, United Kingdom and Germany.
The Bad News
FNB’s house price index reports that the annual property growth sits at an eye watering -7.8%. So over the period of only one year, you’ve lost almost 8% on the value of your house.
Even with Tito’s gift of reducing interest rates, the consumer debt ratio still stands at 75% (So for every pay check you get, you pay 75% to debt… and that’s after tax!)
Economists predict a bloodbath of job losses totalling almost 300,000 by the end of the year, especially in the automotive and mining sectors. This is particularly bad as it affects our biggest exports, namely gold and platinum.
The ‘What’s Next’
As for my ‘calculated’ guess for when all this pain will go away, I would say the middle of next year. My reasons for this are simple:
Sentiment on the global recession will improve due to successful ‘recession proof’ policies implemented this year, coupled with the affects of our local interest rate reductions.
Together with the international exposure of hosting a successful World Cup, our commercial banks will slowly reduce lending criteria, thereby kick-starting the property market once again.
As for today - always remember, the harder the rain, the better the sunshine!
The Good News
Our April elections were judged to be free and fair, but above all, ‘incident’ free. We were praised internationally of being an example not only to Africa, but to the rest of the world. (Hats off to all)
Our beloved Tito decreased the interest rates by yet another 1%, bringing the prime rate to 12%. It’s forecasted that another 1.5% will be cut before the end of the year thereby making the total decrease since December last year a whopping 3.5%! (We want more, we want more!)
And more than 1.8 million tickets have already been requested for the 2010 Soccer World Cup. Applications came from more than 200 countries with the leading countries being South Africa, USA, United Kingdom and Germany.
The Bad News
FNB’s house price index reports that the annual property growth sits at an eye watering -7.8%. So over the period of only one year, you’ve lost almost 8% on the value of your house.
Even with Tito’s gift of reducing interest rates, the consumer debt ratio still stands at 75% (So for every pay check you get, you pay 75% to debt… and that’s after tax!)
Economists predict a bloodbath of job losses totalling almost 300,000 by the end of the year, especially in the automotive and mining sectors. This is particularly bad as it affects our biggest exports, namely gold and platinum.
The ‘What’s Next’
As for my ‘calculated’ guess for when all this pain will go away, I would say the middle of next year. My reasons for this are simple:
Sentiment on the global recession will improve due to successful ‘recession proof’ policies implemented this year, coupled with the affects of our local interest rate reductions.
Together with the international exposure of hosting a successful World Cup, our commercial banks will slowly reduce lending criteria, thereby kick-starting the property market once again.
As for today - always remember, the harder the rain, the better the sunshine!
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