South Africa’s new finance minister, Nhlanhla Nene, delivered his first medium-term budget policy statement on Wednesday. The minister has announced tough and unpopular measures including tax increases, job freezes and across-the-board budget cuts to deal with low economic growth, high debt levels and lower than expected tax income. The market responded positively on encouraging signs that the government is finally willing to implement fiscal consolidation measures in order to prevent the public finances from deteriorating further and the risk of another credit rating downgrade.
Headline consumer inflation (CPI) for September slowed to 5.9% year on year from 6.4% in August – back within the target band and perhaps scope for the Reserve Bank to keep interest rates unchanged at its last meeting of the year in November.
U.S. stocks rose this week amid applause for upbeat U.S. earnings and data, though fresh Ebola concerns trimmed earlier gains later on in the week.
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