Economic sectors pay high price for borrowing
01 December 2011, 14:51
As interest rates soar to record levels and inflation continues
unabated, economic growth is threatening to stall as major sectors that
have been propelling growth begin to stumble. Further increases in
interest rates are likely to spell catastrophic results for these
pillars of the economy, say analysts.
CONSTRUCTION AND REAL ESTATE
The country has since the beginning of the decade enjoyed a vibrant property market hinged on increased purchasing power from a growing middle class and a growing economy. Banks and home loan lenders, alive to the huge potential for sustained growth in this sector, had announced substantial interest rate cuts, cutting mortgage rates by between 1.5 and 4.5 per cent in 2010.
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