ECONOMY WILL SLOW DOWN

Though threatening clouds are gathering on the economic horizon, prospects for Limpopo still look good.
This was the message Standard Bank economist, Ms Danelee van Dyk brought to businesspeople on Tuesday morning during a breakfast meeting.

She said we are likely to see a slowdown in economic growth in the future, with the American economy being under pressure and the setback of the electricity supply shortage locally.
Though household expenditure is at an all-time high of 78 percent, she expects this expenditure to ease.
We also saw food inflation rises, especially a rise in meat prices, but food inflation has become a global phenomenon. These prices are not likely to come down in the near future.

Uncertainties in the market, such as the movement of the Rand nearing the R8 mark against the US dollar, coupled with cash outflow  will contribute to the slowdown of the SA economy.
However, she expects that the Reserve Bank will not announce another hike in the interest rate in the near future.
Limpopo, however, has a vibrant economy and the rate of construction work has exceeded that of the national rate.
House prices  in Limpopo have increased substantially since 2003 and this shows real  development.
Limpopo’s inflation rate is higher than the national average and  poorer communities  spend up to 51% on food, which is really  extensive, Van Dyk said.

Regarding growth in the domestic product (GDP), she said that GDP in 2008 will be 4,0%, while it will be  4,2% in 2009 and a more optimistic 5,8% in 2010.
Limpopo’s MEC for treasury, Mr Sa’ad Cachalia, said the R29,6 billion provincial budget is the fourth highest of all provinces.
 Billions of Rands will be spent on critical areas such as municipalities. They will also look at critical skills and human resources.
"We will have interaction with municipalities in the province and look at ways to bring the necessary capacities together.
"Education will be allocated R14,2 billion, while health services will get R7,6 billion," Cachalia said.