Finweek English Edition - - Economic Trends - BY GRETA STEYN

NED­BANK SAYS – in its lat­est Guide to the Econ­omy – the up­swing in the global econ­omy has gath­ered mo­men­tum, helped by some nor­mal­i­sa­tion in spend­ing and fi­nan­cial mar­kets. The on­go­ing ef­fects of the in­ven­tory cy­cle, as well as stim­u­la­tory Govern­ment and cen­tral bank poli­cies, will last into the sec­ond half of this year. How­ever, the re­cov­ery is still vul­ner­a­ble to set­backs.


THE GER­MAN ECO­NOMIC sur­vey in­sti­tute, the IFO, has found the world eco­nomic cli­mate sur­vey has re­bounded sharply. That ties in with eco­nomic growth fig­ures, which also show re­cov­ery is tak­ing place. How­ever, growth hasn’t been uni­form, with the de­vel­op­ing world out­pac­ing de­vel­oped coun­tries. The re­cov­ery in the de­vel­oped world con­tin­ues to be led by the world’s largest econ­omy, the United States.


IN THE UNITED STATES, con­sumer spend­ing has re­cov­ered by more than an­tic­i­pated over re­cent months, out­strip­ping in­come growth as house­holds again dipped into their sav­ings. How­ever, Ned­bank says bank lend­ing re­mains very weak, sug­gest­ing the credit-fu­elled re­cov­er­ies of the past are un­likely in this cy­cle. Al­though em­ploy­ment is im­prov­ing, the US’s un­em­ploy­ment rate is still high at 9,7%.


CHINA’S FIS­CAL and mon­e­tary stim­u­lus was re­mark­ably ef­fec­tive in fos­ter­ing growth last year, with the econ­omy ex­pand­ing by 8,7% for the year as a whole. That was above its govern­ment’s 8% growth tar­get, an ob­jec­tive that seemed too op­ti­mistic at the start of 2009. Ned­bank says China’s resur­gence was a ma­jor fac­tor in sta­bil­is­ing the global econ­omy and it re­mains vi­tally im­por­tant.


NED­BANK POINTS OUT that South Africa’s mo­tor ve­hi­cle ex­ports have ben­e­fited from the global re­cov­ery. As the graph shows, year-on-year growth in ve­hi­cle ex­ports has re­bounded strongly. How­ever, ex­ports as a per­cent­age of to­tal ve­hi­cle pro­duc­tion are still down. Over­all, SA’s ex­port growth has ac­cel­er­ated strongly, helped mainly by some re­stock­ing in in­dus­tri­alised coun­tries and de­mand for com­modi­ties from China.

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