economy in crisis’

Press, Volume CXV, Issue 33966, 6 October 1975, Page 15

economy in crisis’

(New Zealand Press Association—Copyright)

JOHANNESBURG, October 4. Inflation and the tumbling price of gold has brought the South African economy to crisis point, financial sources said in Johannesburg today.

Rocketing prices have already caused violent reactions among the poorest section of the community—the Africans. Big increases in bus prices at Newcastle, northern Natal, led to clashes between Africans and police this week which left one person dead and several injured.

The devaluation last month of South Africa’s currency, the rand, by 17.9 per cent is bound to send the prices of imported goods soaring. Sources expect petrol prices to be hoisted by about 10 per cent soon. Experts in the car industry expect it to suffer badly, having a drop in sales of up to 15 per cent and laying off for about 4000 workers.

The signs point to Draconian Government measures when Minister of Economic Affairs (Mr Chris Heunis) on Tuesday unveils South Africa’s plans to put the brake on inflation. Under the Government’s action plan against inflation,

there will be a big cut in Government spending, except in defence. The defence budget for the coming year will be 1000 million rand higher. The private sector will have to limit its profits to 15 per cent during the next six months and salaries can be raised by a maximum of 70 per cent of the cost of living.