South Africa's interest rate annus horribilis: after a year of relentless rate hikes in South Africa, the squeeze is beginning to tell and the poor are getting the worst of it. President Thabo Mbeki and reserve bank governor Tito Mboweni are at daggers drawn. Who is right?

Extract

---

South Africa's interest rate annus horribilis: after a year of relentless rate hikes in South Africa, the squeeze is beginning to tell and the poor are getting the worst of it. President Thabo Mbeki and reserve bank governor Tito Mboweni are at daggers drawn. Who is right?

South Africans are having to dig deep to survive financially after seven straight interest rate hikes to the prime bank rate, taking it to 14.5% at mid December, and while third quarter GDP growth came in at a surprising 4.7%, most analysts concur that 2007's economic performance will be no better than 4%. This is 2% under the minimum hoped-for 6% needed to make a dent in South Africa's chronic joblessness and poverty. That rate of growth is now out of the window for the rest of the decade, according to a broad range of analysts' assessments.

...

See the full content of this document

---