Johannesburg — MANY South Africans are still blissfully unaware of the depth and magnitude of the global financial crisis, which is not a bad thing, as it means we are still relatively sheltered from the fallout.

But falling demand from SA's trade partners and plunging prices for its mineral exports will curb economic growth next year, much more sharply than anyone expected.

In this harsh environment, investment from the private and possibly also the public sector is unlikely to meet lofty expectations. This means there won't be as much of a counter to the slump in consumer spending, prompted by higher interest rates. The Bureau for Economic Research has just slashed its growth forecast for next year down to 1,9%, which would be its lowest since 1998.

This is well below the latest official estimate of 3% growth next year, and consensus forecasts of 2,6% growth. But the outcome is still better than the recession much of the world faces. As one economist aptly put it: "Some growth is better than no growth."

The Bottom Line is edited by Edward West