economy risk decreases

2011-12-13 00:00

THE overall risk to the KZN economy has decreased, according to research by Pietermaritzburg-based economist Clive Coetzee.

The KZN Risk Index suggests that the province could be in for a stable 2012 as the index appears to correlate well with the general business cycle.

Coetzee said the low economic performance base set in 2010 and 2011 has meant that the most likely movement will be a positive one.

“We come from such a low base that the next movement will likely be an upward one.”

The index comprises eight key prices and indicators, namely the rand/U.S. dollar exchange rate, the interest rate (R157 bond), consumer inflation, the crude oil price, the sugar price, the gold price, credit extension to the private sector and electricity production.

These indicators will influence the behaviour of key economic participants in the future, Coetzee explained. — Business Editor.

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