Global credit crisis may hobble Eskom

Johannesburg – The global financial crisis may hamper Eskom’s expansion plans, Finance Minister Trevor Manuel said in an interview published on Thursday.

He said borrowing plans by the power utility would probably be affected.

“It’s going to be a lot tougher and may impact on the cost of infrastructure,” Manuel told Business Day newspaper.

Construction work ahead of the 2010 Soccer World Cup could also be affected, he added.
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‘We’re all debt slaves trapped in a death spiral’

By Joseph Edozien

The package sold to the American congress by treasury secretary Henry Paulson will not prevent the breakdown of the financial system based in New York and London.

The breakdown is terminal.

Sooner or later, by one winding path or another, we are entering a new epoch of world history.

This unravelling is global because of the intercontinental reserve currency status of the dollar, fronting also for the euro and the pound sterling.
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We are not immune to upheaval, says Manuel

South Africa’s economy would not escape the “contagion” of the global financial crisis, finance minister Trevor Manuel said on Friday.

While local banks were “relatively well-insulated”, a possible global recession would undermine commodity prices and South African economic growth, Manuel said in a telephone interview with 702 Talk Radio from Washington, where he was attending the annual meeting of the International Monetary Fund and World Bank this weekend.
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Reduced consumer spending slows credit growth to 18.6%

By Mike Cohen and Nasreen Seria

Cape Town – Credit growth eased to an annual 18.6 percent last month, the slowest pace in more than three years, as higher interest rates curbed consumer spending on cars and furniture.

Growth in borrowing by households and companies slowed from 19.8 percent in July, the central bank said yesterday. Credit was expected to rise 19.2 percent, according to the median estimate of 16 economists surveyed by Bloomberg.

The Reserve Bank has raised its benchmark interest rate by 3 percentage points to 12 percent since June last year.
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Two tales of food prices point to lag in inflation

Statistics often raise more questions than they answer. Data on food prices from different sources apparently tell two very different stories on inflation.

Standard Bank says The Economist food price index shows international food prices “have pulled back”, with the dollar and rand price increases down to 39 percent year on year and 47 percent last month, from 67 percent and 81 percent in March and April, respectively.

But figures from South Africa’s National Agricultural Marketing Council (NAMC) show spectacular increases in a wide range of food prices between July last year and July this year.
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Rand, rates and petrol to be hit by global crisis

By Tony Munroe

A further global collapse in financial markets that would tip the United States economy into a painful recession is on the cards, threatening to drag the rest of the world down with it.

South African markets took a pounding yesterday, hit by a global stocks fall and a flight from risk, with investors worried about the stability of US and European banks.

The Johannesburg Top-40 index skidded 6.12 percent – its biggest one-day fall in a decade – to 21 007.17 points, the lowest closing level since October 2006, while the broader All-share index fell 5.76 percent to 23 087.67 points.  More…