GNU having a positive impact on local economy: Kuben Naidoo

Former deputy Governor of the Reserve Bank Kuben Naidoo says there are signs that the Government of National Unity is having a positive impact on the local markets and investors.

He says among the good news is that global interest rates are likely to fall over the next year which will ease financial conditions in emerging economies like South Africa.

Speaking at the Bureau for Economic Research Conference in Sandton north of Johannesburg, Naidoo says there are prospects for significant economic growth next year should South Africa maintain its current performance with a few improvements.

“The dollar is likely to slip a little providing an impetus for commodity prices. South African interest rates are likely to come down as inflation stays close to the midpoint of the target range over the next 18 months supporting a cyclical recovery in demand.  There are already signs that the Goverment of National Unity is beginning to repair the mistrust between business and the state reflective in the fall in the risk premium associated with SA bonds of over 100 basis points over the last couple of months. Throw in lower load shedding and higher freight volume through our ports and we could have 3% growth next year.”