The Western Cape was least affected of all the provinces by the credit crunch in April, according to the BoE Private Clients barometer, and reported in the Cape Argus.  

The economy of the Western Cape shrunk by 7 % in April, compared to 14 % in Gauteng.   The Eastern Cape was also hard hit.   Manufacturing, financial, real estate and business services were the sectors worst hit by the credit crunch in April.

Economist Mike Schuessler has predicted that the interest rate and inflation reductions should stimulate consumer spending, particularly in Gauteng, which has the highest debt levels.   Schuessler says that economic activity in April and May hit “an all-time low”, and that it was difficult to predict when the economy will turn.

Good news is the prediction in the Cape Argus that two further rate cuts of 0,5 % may be in the pipeline for this year, due to the severe 22 % decline in Manufacturing in April.   The Reserve Bank’s Monetary Policy Committee next meets on 25 and 26 June.