Unless something suddenly lets up, the next twelve months could become very difficult for many, says chief economist from First National Bank, Cees Bruggemans.

"There are daily queries about the likelihood of recession. To go cold turkey from 15 percent fixed investment growth, seven percent to eight percent household growth and 5.5 percent GDP growth as recently as late 2007 to negative growth in 2008 would be dire," he points out.

But then these are remarkable circumstances.

"There is interplay of global and local forces, political and policy implacability and a general incredulity still trying to come to grips with this unexpected tornado," notes Bruggemans.

"By all appearances these events came out of left field. They always do, at least in sporting analogies," he adds.

Price shock "gains intensity"

Bruggemans says the global commodity price shock still seems to be "gaining intensity", with oil reaching $120, and as yet there is no end in sight to oil's shocking squeeze and its food contamination.

"Eskom may be winning hearts and minds in government, but not at the South African Reserve Bank (SARB). Labour unions see many opportunities in the current environment to advance their own interests," he adds.

And the SARB is now apparently signalling it is prepared to go to the wire.

"That's the kind of set-up in which heavily indebted consumers can get squeezed badly," says Bruggemans.

"Most exposed are the motor trade, the property market, residential building trade, large parts of the retail trade and manufacturers supplying them," he concludes.

I-Net Bridge