Johannesburg - The rand will remain under pressure this year‚ likely ending the year at around R9.10 to the dollar and in turn boosting exports and economic growth‚ Econometrix chief economist-Azar Jammine says.
Speaking at a GIBS Economic Outlook 2013 conference on Thursday‚ Jammine said recent strikes and social unrest had led to SA winning the currency war by default.
Investor fears over labour and social unrest and a burgeoning current account deficit pushed the rand past R9 to the dollar yesterday.
“The decline in the rand since the middle of 2011‚ is going to continue‚” said Jammine. “By year-end we won’t be weaker than we are now’”.
Jammine was more optimistic than most on this year’s economic growth outlook‚ saying the most telling data was the SARB leading indicator which rose for the fifth consecutive month in November. “That tells me 3% for this year is still not impossible. I’m slightly more optimisitic than consensus forecast‚” he said.
Growth would likely be driven by improved exports and spending on infrastructure‚ according to Jammine.
The IMF yesterday downwardly revised its 2013 growth forecast for SA to 2.8% from a 3% estimate in October.
Jammine forecasts inflation to rise this year‚ but not “dramatically” enough to make the SARB to hike interest rates.
Improving education‚ addressing the labour market environment‚ and developing entrepreneurs and small businesses would address SA challenge of unemployment.
He said Government’s multi-year economic blueprint - the National Development Plan - “was by far the most comprehensive” attempt to address SA’s challenges. - I-Net Bridge