Prospects for South Africa’s policy rate

According to Arthur Kamp, Investment Economist, Sanlam Investment Management  “……the surge in the domestic equity market from its recession induced low in 2009 has helped underpin a bounce in household net wealth, thus further supporting the recovery in household consumption.  Indeed, real consumer spending surprised consensus expectations to the upside through 2010, advancing, on average, at an annualized rate of between five and six per cent per quarter from 4Q09 to 3Q10.
As the business cycle upswing unfolds the rate of return on capital can be expected to improve, which should encourage a recovery in private sector fixed investment spending and job creation. Hence, the upswing in domestic final demand is set to maintain momentum through 2011 and into 2012.”  Read on….