Colen Garrow
Colen Garrow
bank cut exchange likely moral support
What the bank is more likely to do (than cut rates) is intensify its moral suasion in support of a more competitive exchange rate.
additional affordable appear budget collection costs cuts dependency earners exceeding finance fiscal housing income likely low middle minister national personal relief revenue tax welfare
It would appear that with revenue collection exceeding budget this fiscal year, additional tax relief may be forthcoming when Finance Minister Trevor Manuel unveils the national Budget for 2006/2007 on 15th February. Welfare and dependency grants, personal income tax relief, and cuts in those costs which would make housing more affordable for middle and low income earners are likely to buoy consumption expenditure, and manufacturing.
affordable costs cuts dependency earners housing income likely low middle personal tax welfare
Welfare and dependency grants, personal income tax relief, and cuts in those costs which would make housing more affordable for middle and low income earners are likely to buoy consumption expenditure, and manufacturing.
almost confidence consumer cuts cycle fiscal generally higher income interest lowest monetary personal rates record replaced since sound tax
This has, however, since been replaced by a cycle of higher trending growth, underpinned by record confidence; the lowest consumer interest rates since 1983; almost R89bn in personal income tax cuts since 1995; and generally sound macroeconomic, monetary and fiscal stability.
interest meets next rates
The SARB will probably do nothing with interest rates when it meets next week.
government situation thus
The situation as it is, is thus inequitable and will have to be addressed by government at some stage.
committee cycle easier provides reminder stance taken useful
The stance the committee has taken probably provides a useful reminder that the easier interest-rate cycle has bottomed.
code considered exchange good hardly interest issue likely matter moral observers rand rate
Another issue likely to resurface is the matter of 'a more competitive exchange rate', deciphered as code for the rand to weaken. Moral suasion such as this may be good for export-biased manufacturers, but will hardly be considered good for observers of inflation, or long-term interest rate markets.
aggressive ammunition drive fiscal growth household monetary necessary relief showing signs
Fiscal relief may be the ammunition necessary to drive consumption expenditure but with it not being accompanied by aggressive monetary relief, growth in household consumption expenditure is showing signs of consolidation.
activities currency goods impact imported persistent similar strength
Persistent currency strength has had a detrimental impact on export-based activities in the manufacturing sector, making similar imported goods more competitive.
consistent controls deviate environment exchange national path rand remains strong treasury unlikely
While an environment in which the rand remains strong is always appropriate for something more creative, the National Treasury is unlikely to deviate from its consistent path of removing exchange controls gradually.
currency growth hold potential pressure reaching sector
Manufacturing will be under pressure because of currency strength. It will hold the sector back and (keep) growth from reaching its potential level.
battling crippled mining sector similar strong supply
Manufacturing is not the only supply sector battling a strong currency. Mining is being crippled by a similar problem.
corporate remains somewhat tax unchanged
From this perspective, it is somewhat disappointing that corporate tax remains unchanged at 29% and that STC also remains unchanged at 12.5%.