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Economists wait for vital data on economy's health
Figures will hint at future
November 23, 2009
By Ethel Hazelhurst
A raft of economic data due this week will provide South Africans with some insight into what the future holds.
The Reserve Bank will publish its composite lead indicator today, which will show where the economy is likely to be six to 12 months down the line. The bank's previous release showed the indicator had risen for five consecutive months from 105.3 in March to 112.5 in August.
The latest figure will show whether the index has continued to rise consistently, confirmation that an economic recovery is on track.
Data due tomorrow from Statistics SA will show how the economy performed in the third quarter - after three consecutive quarters of contraction. The agency will also revise historic gross domestic product figures. Revisions are routinely published each November as more data becomes available to Stats SA.
In this case, the revisions will also reflect the outcome of a five-yearly rebasing and benchmarking exercise. Rebasing will move the base year for the calculations from 2000 to 2005. And the benchmarking process will provide a more complete picture of the economy as the scope of the surveys have been extended.
Figures now available show the economy shrank 1.8 percent in the fourth quarter last year and 6.4 percent and 3 percent in the following quarters. The figures represent quarter-on-quarter changes, which were adjusted for inflation and seasonal factors and annualised (multiplied by four).
On Wednesday, Stats SA will publish October consumer inflation figures. Consumer inflation has been above the ceiling of the Reserve Bank's 3 percent to 6 percent target range since March 2007, peaking at 13.7 percent in August last year, before falling to 6.1 percent in September this year.
Brian Kahn, the senior deputy head in the bank's research department, told Parliament's portfolio committee on finance last week that inflation would probably continue to exceed the upper level of its inflation target range over the next two years if Eskom were granted its application for a 45 percent electricity tariff rise next year. The bank's projection that it would return to the target by the second quarter is based on a 25 percent hike.
On Thursday Stats SA will publish October figures for producer inflation. Rises in prices of goods leaving factories, farms and mines peaked at 19.1 percent in August last year, before falling back sharply and turning negative in May. Producer prices fell 3.7 percent year on year in September.
On Friday the Department of Energy will announce the petrol price for next month. The underrecovery in the month so far is just less than 29c. The petrol price is linked to international prices of a basket of fuel products and is also affected by the exchange rate.
Bloomberg said oil prices have risen 73 percent this year, but the impact has been cushioned by a strengthening rand. The currency has gained from about R9.50 to the dollar at the start of the year to a best level of about R7.20 in mid-October, before then weakening to trade at about R7.57 on Friday.
Recent rand weakness was due to "policy speculation and announcements", according to Nedbank group chief economist Dennis Dykes.
Government ministers and officials have argued for a weaker rand.
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