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Economy experts predicts trade war to damage U.S. economy

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U.S. economic growth will slow steadily in coming quarters after touching a four-year high in April-June, according to a Reuters poll of economists, who expect President Donald Trump’s trade war to inflict damage.



Boosted in part by $1.5 trillion of tax cuts passed late last year, the U.S. economy expanded at an annualized rate of 4.1 percent in the second quarter, its strongest performance in nearly four years.

But the latest poll of more than 100 economists taken Aug. 13-21 showed they expect the U.S. economy to lose momentum and to end next year growing at less than half that rate.

The U.S. economy was forecast to grow 3 percent in the current quarter and 2.7 percent in the next, a slight upgrade from the previous poll.

But the short-term boost to growth from tax cuts was expected to wane. Economists trimmed their growth projections across most quarters next year leaving the outlook broadly unchanged and vulnerable to the trade conflict with China.

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Nearly two-thirds of 56 economists who answered an extra question said they have considered the impact of Trump’s expanding trade war in their U.S. growth predictions. That was a nearly identical proportion to a poll of economists covering the euro zone published on Wednesday [ECILT/EU].

The remaining 20 said the trade dispute has had no influence on their forecasts but underscored the downside risk if trade tensions deepen.

While Trump has said these trade tariffs will benefit the U.S. economy, no economist polled by Reuters shared that view.

All the tariffs imposed and the retaliatory measures until now have been largely confined to Chinese industrial machinery, electronic components and other intermediate goods and has had only a limited impact on the U.S. economy.

However, the next round of tariffs planned for late September are aimed at consumer products and likely to have a negative impact on the overall economy as consumer spending contributes to over two-thirds of U.S. gross domestic product.

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President Ramaphosa to Sign South African Competition Amendment Bill Into Law

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South African President Cyril Ramaphosa will sign into law today the Competition Amendment Bill, which will strengthen regulations against anti-competitive behaviour in industrial markets.



The bill, which was approved by the National Assembly in October 2018 and endorsed by the National Council of Provinces in December 2018, is a step in the right direction for SMEs, economic inclusion and it opens up the economy to fresh investment and innovation.

It also provides a clear mandate to the competition authorities to address economic concentration in a balanced manner and to promote economic transformation, the Presidency said on Monday.

Additionally, the amended legislation seeks to combat concentration and economic exclusion as core challenges that contribute to slower and less dynamic growth, lower employment and greater inequalities, as well as socio-political conflict.

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The Presidency said this will enable a more effective approach to concentration, with a focus on improving outcomes for small and black-owned business, and strengthen the institutions involved in managing competition policy and law.

The signing ceremony will take place this afternoon at the Tuynhuys Chambers in Parliament. Economic Development Minister Ebrahim Patel, who campaigned fiercely for the bill’s codification, will join the ceremony along with a group of stakeholders.

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Manufacturing Output Growth Slows Again in South Africa

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The preliminary data from Statistics South Africa has showed the rate at which South Africa manufacturing output slowed twice again within the month of December.




Negative contributions came from petroleum, chemicals, rubber and plastic products, iron and steel, non-ferrous metal products, metal products and machinery industries to make outputs edged up a non-adjusted 0.1% year-on-year in December following a 1.3% increase in November and a 3.0% gain in October

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As against a drastic output growth in the prior month; 0.7% following a 0.4% rise in November

Meanwhile motor vehicles, parts and other transport equipment, food and beverages, glass and non-metallic mineral products made the biggest positive contributions in December.

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