South Africa’s targeted inflation - the Consumer Price Index excluding interest rates on mortgage bonds (CPIX) has risen to a new five-year high of 11.6% year on year in June from 10.9% year on year in May, Statistics South Africa said today (30 July). The surge is attributed to rising international oil prices and soring food costs. The higher than expected figure could put pressure on the Reserve Bank to raise interest rates yet again next month. This is the fifteenth month running that CPIX has been above the 6% upper target limit set by the Central Bank. Read the rest of this entry »

It is no secret that we face an electricity crisis in South Africa. Eskom have just not been able to cope with the increase in demand of electricity due to the growing economy. The government and Eskom are trying to find a solution to the electricity crisis. There are suggestions that new power plants have to be built over the next couple of years and more coal will need to be secured inorder to power these plants. Funding for this expansion has not been easy as consumers seem to be the main contributors to the funding with electricity tariffs set to rise.

There have been calls by many to find alternative means of power to help increase the supply of electricity in South Africa. Many wonder why there has not been a major drive to start using more and more solar power. After all, we are in South Africa where we get a lot of sun shine through out the year. There are many countries in Europe using solar energy and they do not get as much sun shine as we do in South Africa. The cost of setting up the solar power infrastructure is relatively high but it would be a good long term investment. Read the rest of this entry »

As sales of new cars continue to go down in South Africa, it is worth noting that it is not only an issue in South Africa but through out the rest of the world. Jennifer Yousfi from Money Morning, takes a look at hoe car makers across the world are trying to fight against this slump in cars sales by looking at the emerging markets.

A trio of European automakers, including Volkswagen AG, yesterday (Wednesday) released stronger than expected second-quarter results based on strong car sales in emerging markets.

In addition to Germany’s Volkswagen, France’s PSA Peugeot Citroen SA and Italy’s Fiat SPA reported yesterday, and reaffirmed their outlook for the remainder of 2008, which gave all three shares a boost in European trading. Read the rest of this entry »

It is really no surprise that more and more cars are being repossessed in South Africa. The current economic climate is causing more and more people to be unable to afford making repayments on their cars. Wesbank, South Africa’s largest vehicle financier, said on Wednesday (16 July) it repossessed nearly 2 000 vehicles per month as at June 2008, compared with just over 1 000 vehicles the same time last year. That is double the amount. In June this year, Wesbank repossessed 1 806 vehicles - up sharply from 1 061 vehicles in July last year. Read the rest of this entry »

We may be in for even tougher times according to T-sec economist Mike Schussler. There could be another fuel price increase in August by between 20 and 40 cents. This coming off the back of an increase on July 2. The reason behind the potential August increase is because the world oil markets right now are very volatile and know one really knows what is going to happen. For the current month there was a 54 cent under-recovery overall for petrol and 60 cent under-recovery for diesel, this will most likely result in the 20 - 40 cents increase. Read the rest of this entry »

The local stock exchange is in a state of panic. Yesterday, stocks were down 3.11% resulting in a total weekly loss of 7%. Many economists are not really surprised with the events taking place on the JSE with some saying that it is “normal” for the market to have a correction after shares have “run for so hard so long”. Another contributing factor to the slump of the JSE may be attributed to the strengthening of the rand as local investors look to sell off their shares and opt for trading in the currencies market. The rand had strengthened by more than one percent to a one-month high against the dollar on Thursday, adding to Wednesday’s sharp gains. Read the rest of this entry »

New vehicle sales continued to drop in South Africa in the month of June. Statistics from the National Association of Automobile Manufactures of SA (Naamsa) showed that sales were down 21.9% in June compared with the same period last year. In May new vehicle sales fell 23.4%, or 12 095 units year on year. This is a bad time for the motor industry as sales continue to plummet. One can only wonder, how long will the motor car dealers and manufacturers be in business for? Read the rest of this entry »