Nedbank Guide to the Economy – July 2012.
International background and outlook.
Global economic conditions deteriorated in the second quarter as the crisis in the Eurozone continued and other major economies faltered. There was a generalised slowdown in manufacturing and weaker employment conditions. The weakness extended to both the US and Germany, where indications earlier in the year had suggested that the worst of the slowdown was over.
China’s growth rate remained relatively high, but has slowed considerably from 2010 and 2011 levels. Other emerging markets also experienced slower growth.
Against this background, commodity prices were generally weaker and financial markets volatile. Central banks have resumed easier policies.
Domestic review and prospects
Domestic economic growth has slowed in the face of weaker external demand and slower consumer spending and capital formation by the private sector. Although interest rate levels remain at historically low levels, consumer confidence is weak due to the uncertain
environment, lack of job opportunities and still high household debt. Prospects will largely be determined by developments in key trading partners, but some
acceleration in infrastructure provision by government and better policy certainty would improve the overall climate.
Facts and forecasts
See the full Guide to the Economy