By Cees Bruggemans, Chief Economist FNB

Evidence continues mounting that our economy has turned the corner in tandem with most overseas countries, if at a slower speed.

Our stock market has marched closely in lockstep with global markets, reaching its cyclical low last November, and revisiting this level last March, after which a 40% rise followed (less vigorous than elsewhere).

Our non-gold mining output reached its cyclical low in January 2009, electricity output bottomed in February, manufacturing output did so in April, all thereafter in a rising trend.

Nominal house prices appear to be rising from July and passenger car sales (per trading day) seem to be rising from August. Our exports as denominated in Dollars bottomed in January, thereafter also rising.

So recovery has been with us for some time, even if opinion surveys and other leading indicators took their time confirming this.

The SARB leading indicator reached

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By Cees Bruggemans

The SARB decision last week to resume cutting interest rates is interesting, given that our CPI inflation is likely to only modestly decrease further towards 5% next year, even as global growth keeps signaling its return and our own economy likewise signals a turn in progress.

What does that make the SARB action?

Are we being unnecessarily impatient with results, reminding of 2002-2003? At the time rates were probably cut too far, eventually inviting excessive consumption and import booms. Are we now running similar risks?

Or do current circumstances warrant vigorous policy support for longer, making sure the cycle does turn?

We certainly haven’t lacked with policy support measures boosting the economy in these trying times.

The SARB lowered interest rates by 450 points in six months through May 2009, while Treasury allowed an even bigger fiscal turnaround than imagined (from a budget surplus of

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by Edward Hugh: Barcelonabr /br /br /blockquote"For what it’s worth, a key conclusion from the IMF’s new World Economic Outlook is that recessions caused by financial crisis typically end with export booms, with the trade balance improving,on average, by more than 3 percent of GDP. I find this a disturbing result: we’re now suffering from a global financial crisis, which means that the usual driver of recovery will only be available if we can find another planet to export to."br /a href="http://krugman.blogs.nytimes.com/2009/04/27/japans-recovery-again/"Paul Krugman /abr /br //blockquoteblockquoteWith results still coming in, projections show the United Progressive Alliance is likely to win about 250 seats, making it a shoo-in to form the next government and provide continuity, a stable administration and progress on key economic and corporate reforms.br /a href="http://online.wsj.com/article/SB124247401653426893.html"Wall Street Journal/a, May 16 2009/blockquotebr /blockquotePrime Minister Manmohan Singh’s electoral victory, the biggest any Indian politician has scored in two decades, may ...

This may be one of the most worrisome statistics I've seen about the Chinese economy.China's power production declined by 4% in October, the first drop since March 2005.

This may be one of the most worrisome statistics I've seen about the Chinese economy.China's power production declined by 4% in October, the first drop since March 2005.

China's industrial production grew at the slowest pace since February 2007 on weaker export orders and factory shutdowns to clear the air for the Olympic Games. Production rose 14.7 percent in July from a year earlier, the statistics bureau said today, after gaining 16 percent in June. Weakness in economies around the world have reduced orders for export products, while higher fuel and raw-material prices deterred some companies from expanding. The slowdown, exacerbated by attempts to prevent pollution in Beijing during the Olympics, suggests an acceleration in China's July export growth is unlikely to be sustained. The yuan fell to 6.8620 against the dollar as of 5:05 p.m. in Beijing after closing at 6.8570 yesterday. Textile output rose 10 percent in July from a year earlier after gaining 12.4 percent in June. Steel products growth weakened ...

India's industrial output growth accelerated slightly in June. Output at factories, utilities and mines rose 5.4 percent from a year earlier after a revised 4.1 percent gain in May, according to data fromthe Central Statistical Organisation. What this means is thatIndia's industrial production grew 5.2 percent in the quarter ended June 30, almost half the 10.3 percent pace in the same period a year earlier, and this will almost certainly be an important negative for Q2 GDP growth. Factory output growth may well slow further in coming months following interest rate and cash reserve increases from the central bank. Manufacturing, which accounts for about 80 percent of Indian production, gained 5.9 percent in June, compared with 9.7 percent in June 2007. Electricity output rose 2.6 percent in June from 6.8 percent in a year-ago, mining grew 2.9 percent ...

India's inflation accelerated again at the end of June, reaching the fastest rate since 1995, raising the posibility that the central bank will need to increase borrowing costs for a third time this year as early as its next meeting. Wholesale prices rose 11.89 percent in the week to June 28, after gaining 11.63 percent in the previous week.

India's central bank next meets to review monetary policy on July 29. Last month the bank raised its benchmark interest rate twice to a six-year high of 8.5 percent and lifted its cash reserve ratio to 8.75 percent, in an attempt to slow the rate of increase in the money supply.In a sign that the tightening may in fact be working liquidity seems to have been under pressure all week in the Indian banking system as banks had to

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