Local issues

Locally, Kevin Lings, economist at Stanlib, says that fixed investment has been solid at 8% for the last three years, with some tail-off for 2006.

The slow down will come in the residential property market, and it will be replaced by non residential building. If growth stays at 4% there will be a demand for commercial property.

Turning to the issue of the current account deficit, it appears that South Africa has been flagged by a rating agency. South Africa is at 4.5% growth rate, which is on the wrong side of the 3% average, and Moodys says that while it has been flagged its not going to feature in their report.

This follows the flagging of Iceland, and the subsequent downgrade of their sovereign risk, and the re-rating of their stock market by about 17%.