Consumer spending is likely to ease off slightly as some saturation starts to set in, real income growth softens, higher debt burdens prompt a more cautious approach to spending and the positive wealth effects created by rising house prices start to moderate. |
Despite the strong domestic demand, high oil prices and rising food prices, inflation remains relatively benign at both producer and consumer levels. |
Some industries will benefit from the anticipated strength in domestic spending and the planned acceleration in infrastructure spending, while others are expected to remain under strain from a strong rand and softer global growth. |
The real focus is going to be on whether it's spent effectively. Obviously they (the government) feel that they have the capacity to do so. |
There's no need to cut interest rates to stimulate consumer demand or investment spending. |
We expect a neutral monetary policy stance in 2006, but much will depend on movements in the rand and the performance of mining and manufacturing. |