With all the gloom and doom it's hard to find some hope out there. The good news is there are some positive events happening in our economy.
Interest rates are falling
Interest rates have come down by a cumulative 350 basis points since December 2008 with more cuts envisaged in the coming MPC meetings. This has helped raise some disposable income and provided relief. For example a household with a R1 000 000 bond will be paying approximately R2 900 less per month.
Household debt is declining
Household indebtedness is coming down with households taking up less debt. Growth in credit extension to the private sector has decelerated from a high of 27,5% in October 2006 to 8,5% in March 2009.
Inflation improving
Inflation is sticky but on a downward trend. In its latest MPC statement the Reserve Bank indicated that inflation is forecast to fall below the upper 6 per cent of the target band by the third quarter of this year.
Stronger Rand
With the oil price rising sharply in May, the strong Rand has helped cushion the effect at the pumps.
Zuma Job Creation Strategy
Zuma announced his ambitious plan to create 500 000 jobs by the end 2009 today. Economists are very sceptical saying it is over zealous but it does show the positive attitude of the ANC. I say reach for the stars and you might land on the moon!
Government Spending
Government spending is strong and set to continue until 2015 .
