Global Economic Outlook Presentation FINAL

8/9/2019 Global Economic Outlook Presentation FINAL

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Global Economic OutlookMay/June 2012


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Agenda


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Introduction


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Introduction

Global EconomicOutlook 2012

The global economy is on a narrow ath o! slow and !ragile reco"ery

Oil and commodity rices remain high and will continue to ut !urther

ressure on the global economy

#outh $!rica%s robust !inancial institutions and moderate !iscal and

e&ternal debt absorbed the imact o! the global downturn to a large

e&tent'

(owe"er) the country needs to address its structural challenges

including) unemloyment) education and ine*uality in order to be aglobal economic layer


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Introduction

$ signi!icant decline in acti"ity across the economy) lasting longer than a !ew

months' It is "isible in industrial roduction) emloyment) real income and

wholesale+retail trade' The technical indicator o! a recession is two

consecuti"e *uarters o! negati"e economic growth as measured by a

country,s gross domestic roduct -G.

e!ers to the market "alue o! all o!!icially recognied !inal goods and

ser"ices roduced within a country in a gi"en eriod'

Is a sustained) long+term downturn in economic acti"ity in one or more

economies' It is a more se"ere downturn than a recession) which is seen by

some economists as art o! the modern business cycle'

The recurring and !luctuating le"els o! economic acti"ity that an economye&eriences o"er a long eriod o! time' The !i"e stages o! the business

cycle are growth -e&ansion) eak) recession -contraction) trough and

reco"ery' $t one time) business cycles were thought to be e&tremely regular)

with redictable durations) but today they are widely belie"ed to be irregular)

"arying in !re*uency) magnitude and duration'

Recession:

Gross domesticproduct (GDP)

Depression:

Business cycle:


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#ession 13 Global outlook


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Global outlook

Source: Economic Intelligence Unit, March 2012


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Global outlook


The global economy is on a narrow ath o! slow and !ragilereco"ery' Many countries are struggling with a massi"e debtburden and high unemloyment ersisting to bog down theireconomies and hamering growth'

Oil and commodity rices remain high and will continue to ut!urther ressure on the global economy


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Global outlook

According to the Economist Intelligence Units (EIU) March economic outlook, world GDPis exected to grow !" #$%& on a market exchange rates !asis in #'%#, slowing downmarkedl" rom the reious two "ears$



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Changes in global economic risks

North American region

Asia pacific region

Middle East region

African regionatin America ! the"ari##ean region

Greater Russia region

Europe region

Source: Energy Policy Scenarios to 2050, World Energy Council !alues in mn tonnes"

Production (Mntonnes)

Consumption (Mntonnes)

Compounded annualgrowth rateconsumption

*egend

0.9%

1.8%

1.2%

0.8%

-2.%

-1.2%

-0.9%


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Energy intensity

Economic growth is closely related to growth in

energy consumtion because the more energy is

used) the higher the economic growth' (owe"er) itis ossible to decoule energy consumtion and

economic growth to some e&tent' More e!!icient

use o! energy may entail economic growth and a

reduction in energy use'

Economist Intelligence Unit, #PM$ calculations


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Cumulative investment in energy infrastructure require 2011 20!"

Natural Gas $ %&' trillion

Bio$uels $ %*'+ trillion"oal $ %,', trillion

Po-er$ %,.'& trillion

World Energy %utloo& 2011, 2010 real terms"


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Global outlook

The economy grew by 1'45 in

2011) but grew by 2'65 in 78o! 2011'

The in!lation rate !or 2011

doubled to 9'25 !rom 1':5 in

2010'

Growth rosects !or 71 2012

are around 2 to 2'25 on the

back o! a gain in consumer

con!idence%s subse*uent retail

sales and manu!acturing'

ersistently high

unemloyment and risks o!

downturns in markets abroadwill kee the ;E.%s olicy rate

at "ery low le"els until e"en as

late as 2018'

/nited 0tates

Euroean economic growth

slowed during 2011 to 1'


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Global outlook

Emerging Mar2ets

The =I> countries are

recognised as ha"ing "ery

large economies and

oulations) with unra"elled

growth otential in !oreseeable

years'

The =railian economy

e&erienced raid e&ansion inthe last decade with strong

economic growth

ussia e&erienced strong

economic growth o"er the ast

!ew years) but manu!acturing

and !oreign in"estment slowed

down since the globaldownturn'

BR3"0

The ?e&t 11 consist o! #outh@orea) Iran) Me&ico) Turkey)

hiliines) Indonesia) Egyt)

?igeria) akistan) Aietnam and

=angladesh'

These economies are smaller

in sie than the =I>

countries) but with its largeoulation sie and growth

rates o! abo"e the global

a"erage) romises !a"ourable

oortunities !or !uture

in"estment and market growth'

4he Ne5t ,,

;ears surrounding an

economic downturn ha"e lead

EM central banks to either cut

their interest rates or ostone

monetary tightening during

2011'

Market e&ectations are that

EM countries will outer!ormde"eloed countries between

2019 + 201:) as interest rate

di!!erentials will !a"our

in"estment into these EM

countries o"er that o! the

OE>. economies'


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#ession 23 $!rica


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#here are $e no$%


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#here are $e no$% &ub &aharan Africa

$ngola

B$ngola%s increased oil outut

contributes about 6


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#here are $e no$% &ub &aharan Africa

Ghana

B Ghana remains oneo! the world%s biggestgold roducers andother e&orts include

cocoa) natural gas)timber anddiamonds'

Moambi*ue

B Moambi*ue is aresource richcountry) roducing!ood) be"erages)

chemicals)aluminium)etroleum roducts

B In!rastructurede"eloment)esecially electricity)is necessary toincrease outut and

create morein"estmentoortunities'

?igeria

B ?igeria%s "astoulation sie andwell de"eloed!inancial and

communicationssectors continue toattract mobile honenetworks and bankslooking to caitaliseon the large amounto! unbankedindi"iduals'

Dambia

B Dambia is a largeroducer androcessor o! coerand this hard

commodity is itsmain e&ort) withagriculture being animortant illar o! theeconomy'


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#here are $e no$%

6**, $ 6*,* 6*,, 7 6*, : orecast

2001

+2010

2011+201hina

'ongo

4'0

Aietnam

4'2

$ngola

11'1

wanda

4':

>ambodia

4'4

?igeria6'

@aakhstan

6'2

Ethioia

6'8

Myanmar

10'9

>hina

10'had

4'

Moambi*ue

4'

Ethioia

6'1Moambi*u

e

4'4

Ghana

4'0

Source: IM' World Economic %utloo&, 'e(ruary 2012

Most of the fastest de8eloping economies are in the 0u#$ 0aharan region


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#here are $e no$%' (orth Africa

$lgeria

B$lgeria isrenowned !or itsoil and gasreser"es) andthese resourcesha"e dominatedits e&ortindustry and

continue tocontributegreatly towardsthe country%sG.

Egyt

B Egyte&erienced aeriod o!acceleratedgrowth !ollowingre!orms tostimulatein"estment

during the last!i"e years

B The economy isbased onagriculture aswell as e&ortso! their naturalresources

including oil)coal) natural gasand hydroower'

Fibya

B Fibya is slowlyreco"ering !roma criling ci"ilwar and likesome o! itsneighbouringcountries

Morocco

B Morocco is theworld%s largeste&orter o!hoshorus andmining)construction andmanu!acturingmake u ust

o"er hal! o! thecountry%s G.'

B The high imortcost o! oil willcontinue to utressure on theMoroccaneconomy as the

rice continue toremain high'

B Hnemloymentand in!lation isrelati"ely low

Tunisia

B The country hasa di"ersi!iedeconomy)ranging !rommining)agriculture)manu!acturingand

etrochemicalsto tourism whichwas hea"ilyimeded onduring there"olt'

B In!lation remainsrelati"ely

moderate)B (igh le"els o!unemloyment)eseciallyamong its youth'


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#here are $e going%' )uture trends

4he future

*04he num#er of people per

s9uare 2ilometre (populationdensity) #y 6** (/N)

10+

ld age dependency ratio of,*; #y 6** (/N)

,1-. billionAfrica


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#here are $e going%' )uture trends

BIn!rastructure e&ansion andnetwork growth are areas o!

de"eloment in the !uture)seeding u nationalrocesses and connecting$!rica to the rest o! the world'

B$!rica currently sends %=

#illion per annum onin!rastructure) when it shouldbe sending about %&+#illion in order to catch uwith other de"eloingregions in the ne&t ten years'

B$!rica is a net imorter o!!ood and unable to meetlocal demand'

Bith :05 o! the world%sunculti"ated arable landand low cro yields $!rica

has enormous otential !ora green re"olutionK similarto those seen in $sia and=rail

BThe imact o! climatechange could be se"ere)seeing that :5 o! $!rica%sagriculture is e&tremelyrain!all deendent

In!rastructuree&ansion

>hallenges$!rica !aces

>limatechange

;ood imort


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#ession 93 #outh $!rica


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&A and the global economy

0A lin2s -ith glo#al economy andglo#al do-nturn

0A as part of the BR3"0Glo#al factors affecting 0A

economy

0A


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#here are $e no$%

Europe>s financial crisis

$!!ects worldeconomic

growth

>ontinues toway down!inancial

markets andhamer global

growth

0outh Africa


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#here are $e no$%

A challenging en8ironment

$ctual Estimate ;orecast

2010 2011 2012 2019 2018

;inal household consumtion 9'4 8' 9': 9'6 8'2

;inal go"ernment consumtion 8' 8': 8'1 8'1 8'1

Gross !i&ed caital !ormation +1': 8'9 8'1 8'< :

Gross domestic e&enditure 8'2 8'1 9' 8'2 8'

E&orts 8'< : 2' I in!lation 8'9 < :'2


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#here are $e no$%

0outh African competiti8eness relati8e to peers


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#here are $e no$%

0outh African competiti8eness relati8e to peers

Ine!!ecti"e

Go"ernment

bureaucracy

Inade*uate

Educated

work!orce

estricted

Fabour

regulations

>orrution >rime The!t

#$

roblematic

!actors

!or doing

businessPositi8eimpact

on)D3onclusion


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Conclusion


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7 L $


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A


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Global Economic Outlook Presentation FINAL

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