Fuel price warning
Falling oil prices also had a negative impact, noted Jammine. “We are losing out because Oil prices could bounce back to $65, $70 a barrel, with the price already strengthening in February to above $50 a barrel, said Econometrix director and chief economist Dr Azar Jammine on Tuesday.
“Collapsing oil prices have seen the cost of domestic fuel come down by around 30% from a year ago, but it’s not going to stay that way,” he warned. “The petrol price will go up by 40c, 50c next month. So enjoy February’s low prices.”
se other mineral prices are also low. African economies, such as Nigeria and Angola, are dependent on oil exports, and a slowing regional economy would be negative for South African exports, he said.
South Africa’s 2014 exports to the rest of the continent were 30.5% of total exports, almost overtaking exports to Asia, at 30.9%, said Jammine.
Looking at exchange rates, Econometrix expected the rand to end the year at R12.04 to the Dollar, R13.72 to the ‘collapsing’ Euro, R17.82 to the pound, and R10.44 to the yen.
South Africa’s economy was expected to grow by 2.3% in 2015.
Jammine added that the South African government could look at increasing the fuel levy to fund its income gap, rather than increasing value-added tax or personal tax.
He said a 56c/l increase in the fuel levy would earn Treasury an additional R12-billion to R15-billion a year, with the blow softened by lower fuel prices.
By: Irma Venter