Tag Archive | economic outlook 2012

Uncertainty is the only certainty in 2012: BUSA

In presenting an “economic perspective” on 2012 – presented one week before the Budget- Prof. Raymond Parsons of BUSA told the NA economic committee in Parliament that the “only certainty in 2012 was the continued uncertainty in the global economy.”

He said the situation in the Eurozone highlighted how continued procrastination by economic leaders led to all kinds of uncertainty and therefore in the case of South Africa, the year of 2012 had to be “a year of implementation” and delivery.

High interest rates in South Africa had led to an influx of foreign capital in 2011, he said, keeping the rand strong but, in contrast its strength and volatility had to some extent hampered exports.

Parsons said that BUSA saw South Africa lagging behind developing economies in 2012 and it was not helping that the country had dropped its positioning on the global table of countries with a good record “of ease of doing business”.

BUSA had also noted a recent Grant Thornton survey, Parsons said, that recorded that “over-regulation and red tape were the “biggest constraints to expansion in South Africa” and he believed, like BUSA and many respected business groupings with him, that SMMEs are the best hope in such times for job creation and innovation.

South Africa had to boost its SMME activity since “80% of new jobs could come from this direction.”   He told parliamentarians that “South Africa’s fiscal space was shrinking” and that focus had to be on “structural factors” that would give economic returns in the long run.

Balancing welfare payments against a limited tax base would a major problem in the coming year, Parsons said, and an outcome of the nationalisation debate was critical he said in order to settle down an unsure foreign investing market.

As growth would be insufficient to meet socio-economic challenges, Parsons commented that co-operation with the private sector became all that more important in 2012.

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