After real growth rates in excess of 3 percent per annum for 1995 and 1996, GDP growth slowed to below 2 percent in 1997. Population growth rate is also showing a modest decline and is estimated to have dipped to below 2 percent in 1997. Inflation rate, as measured by CPI, has now been at a single digit percentage for three successive years and is anticipated to continue at a relatively low level.
The Rand currency remained relatively stable against that of the major trading partners, with a trade weighted decline of just over 3 percent. Exports grew by 8.5 percent and imports by 7 percent during 1997.
Unemployment remains at a high level and only sustained economic growth, coupled with a decline in population growth rate, is likely to cure this situation over time.
Government policy remains firmly focused on a sound long term view, based on free market principles. Hopefully this will not be influenced by the forthcoming 1999 general elections.
The outlook remains one of steady but unspectacular growth, modest inflation and a gradual rise in standards of living.
In line with world trends, the Industry experienced modest price recovery during 1997, only to falter again towards the end of the year and into 1998. The Asian crisis is likely to have a significant effect on the South African industry since it has been a traditional market for particularly pulp from South Africa.
During 1997 there have been no major new investment in the industry and no significant shift in domestic consumption versus imports and exports.
There is yet no clear picture emerging on the water conservation and afforestation policy to be pursued by the Government. This could have a significant influence on the long term future of the industry.
Domestic demand is expected to grow modestly and the local industry is focusing on improved productivity to compete against imports as well as to remain competitive in export markets.
In the short term, reduced demand from South East Asia will be felt and may require selective production curtailment.
