Oorsig: – Suid-Afrikaanse Ekonomie
Aangebied deur:
Dawie Roodt
9 November 2007
Through the Eyes of the World
Source: The Economist
January 20-26, 2007
Full page advertisements
(Est. Cost: £87,500)
The Oppositionp. 15
The Home Teamp. 17
Value for Money?Macedonia South Africa
Taxes
Efficiency
Competitive labour
Access to markets
Stability
Infrastructure
Property rights -
But why say it?
GDP
GDP at Market Prices
GDP market prices, q:q seasonal
-1
0
1
2
3
4
5
6
7
8
1994 1996 1998 2000 2002 2004 2006
%
Source: StatsSA and own calculations
GDP per capita '00
20000
21000
22000
23000
24000
25000
26000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
R
GDP
Source: StatsSA and own calculations
Employment and Output Growth by Economic Sector, 2005
Industry
Persons
Employed
(‘000)
Ave. Growth Employment
1996-2005
Ave. Growth Real output
1996-2005
Finance, real estate and business services
1,526.6 5.2% 5.3%
Wholesale and retail trade; hotels and restaurants
1,385.4 2.4% 4.6%
Manufacturing 1,188.2 -1.5% 2.8%
Agriculture, forestry and fishing 742.8 -2.1% 1.5%
Mining and quarrying 445.9 -2.6% 0.6%
Construction 406.2 -4.1% 4.3%
Transport, storage and communication
317.8 -3.6% 6.5%
Electricity, gas and water 55.7 -2.7% 0.6%
Private economy 6,159.1 0.3% 3.9%
Source: Productivity Statistics 2006
Fiscal Policy
State Finances
Revenue & Expenditure:GDP
20
21
22
23
24
25
26
27
28
29
30
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
%
Trevor’s reign!
Gold
Medium Term Budget (MTBPS)
R bn Budget ’07MTBPS Oct’07
Expected ’07/08
Difference to Budget
Revenue 544.6 553.2 558.0 13.4
Expenditure 533.9 542.4 541.4 7.5
Deficit/Surplus 10.7 10.8 16.6 -5.9
% of GDP 0.6% 0.7% 0.7%
Source: Treasury and own calculations
Monetary Policy
Interest rates
Prime
9
11
13
15
17
19
21
23
25
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
%
De Kock (16.5%)
Stals (18.9%)
Mboweni (13.1%)
Interest rates
Prime
10.0
10.5
11.0
11.5
12.0
12.5
13.0
13.5
14.0
14.5
2005 2006 2007 2008
%
Inflation ?
GDP and Real Interest Rates
GDP and Real Interest Rates
3
5
7
9
11
13
15
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
%
0
1
2
3
4
5
6
Source: StatsSA, SARB and own calculations
%
Inflation
Inflation
Inflation bracket
CPI & CPIX
0
3
6
9
12
15
18
21
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
%
Source: StatsSA and own calculations
14.6%
10.0%
5.2%
Debt Levels
Private Sector Credit Extension
PSCE (excl Bill & Investments) and Mortgage Advances
8
13
18
23
28
33
Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07
%
Source: SARB and own calculations
Household debt to disposable income
Household debt to disposable income of households
40
45
50
55
60
65
70
75
1970 1975 1980 1985 1990 1995 2000 2005
%
Source: SARB and own calculations
44.5%
50.2%
56.9%
59.4%
Savings to disposable income of households
Ratio of saving by households to disposable income of households
-2
0
2
4
6
8
10
12
1970 1975 1980 1985 1990 1995 2000 2005
%
Source: SARB and own calculations
9.2%
5.4%
2.6%
0.5%
Balance of Payments
Balance of Payments
Current Account vs Financial Account
-8
-6
-4
-2
0
2
4
6
8
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
% GDPBarclays/Absa
De Beers delisting
Sanctions liftedDebt Standstill
Source: SARS and own calculations
Capital Expenditure
First Picture of Cape Town’s New Stadium:
Capital Expenditure Institute
Time Horizon
Planned Capital Expenditure (Rbn)
Sasol 2013 62.0
Eskom 2011 150.0
World Cup 2010:
Gautrain
Acsa
Stadiums
2010
2011
2010
24.0
20.0
8.4
Transnet (Rail, Ports, Pipelines)
2012 78.0
State (National Budget)
2009 372.0
Socio-Economic Development
Close-up on South AfricaCategory 2004 2006
Total population (000) 46.6mil 47.4mil
Annual population growth rate (%) 1.1% -0.4% ?
Population 0-14 years(%) 33% 32%
Rural population (%) 41
Total fertility rate (births per woman) 2.8 2.7
Infant mortality rate (1,000) 53 60
Life expectancy at birth (years) 46 42
HIV rate (%) in adults (15-49 years) 15.6 18.8%
Poverty (% of pop. on less than $2 a day) 34
GDP per capita (PPP) US$ 11 192 12 760
GDP growth rate (%) 4.5% 5.0%
Children of primary school-age who are out-of-school (%) 7 Source: Unesco and World Bank Development Indicators
Global Trends
Largest Populations, LatestMillions, (% of World Population)
1 China 1,321.8 (20.2%)
2 India 1,129.8 (17.3%)
3 United States 301.1 (4.6%)
4 Indonesia 234.7 (3.6%)
5 Brazil 190.1 (2.9%)
6 Pakistan 164.7 (2.5%)
7 Bangladesh 150.4 (2.3%)
8 Russia 141.4 (2.2%)
9 Japan 127.8 (2.0%)
10 Nigeria 127.4 (1.9%)
27 South Africa 47.9 (0.7%)
World 6,537.8 (100.0%)Source The economist Pocket word in figures 2007/Nationmaster.com
Population growth estimates
Source The economist Pocket world in figures 2007
1950, Mil 2004, Mil 2050, Mil
1. China 550 1. China 1313 1. India 1593
2. India 358 2. India 1081 2. China 1392
3. USA 158 3. USA 297 3. USA 395
4. Russia 103 4. Indonesia 223 4. Pakistan 305
5. Japan 84 5. Brazil 181 5. Indonesia 285
47.0%
World Rural Versus Urban Population
World Rural Versus Urban Population
0
1
2
3
4
5
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Billions
Rural population Urban population
Source: UN, World Urbanization Prospects 2005
Effect on global demand for food and
commodities!
SA: Cross Over 1985
Biggest Economies GDP by purchasing power (PPP), $bn, 2006
1 United States 13,881
2 China 9,984
3 Japan 4,170
4 India 4,158
5 Germany 2,558
6 United Kingdom 2,121
7 France 1,934
8 Italy 1,790
9 Russia 1,727
10 Brazil 1,701
20 South Africa 606
World (GDP) 66,228 Source International Monetary Fund
Percentage of World GDP ‘063%
30%
3%3%
4%5%5%6%
6%
9%
26%
Africa Rest of the World Spain CanadaItaly France UK ChinaGermany Japan USA
Source: World Bank
Other Trends
Dollar vs Euro
Dollar vs Euro
0.8
0.9
1
1.1
1.2
1.3
1.4
1.5
1990
1990
1991
1992
1993
1994
1995
1995
1996
1997
1998
1999
2000
2000
2001
2002
2003
2004
2005
2005
2006
2007
USD/EUR
Source: I-Net
9/11
Sub-Prime Crisis
Gold Price, Annual Average London
Gold Price Annual Average London, US$ per Oz
0
100
200
300
400
500
600
700
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
$
Source: Comex, London Bullion Market Association
Record: $850 p.o:
-Soviet Invasion of Afghanistan
- Revolution in Iran
- Dollar weakness
- Sub-prime Crisis
Top Gold Producers, 2004
Country Tonnes
1 South Africa 340.4 (2006: 275.0)
2 Australia 259.0
3 United States 258.0
4 China 194.4
5 Russia 180.5
6 Peru 173.2
7 Indonesia 164.4
8 Canada 130.7
9 Uzbekistan 86.0
10 Papua New Guinea 73.5Source The economist Pocket world in figures 2007
Oil Price (Brent Crude)
Brent Cude Spot Oil price, US$ per barrel
0
10
20
30
40
50
60
70
80
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
$
Source I-Net
Yom Kippur War
Iranian RevolutionGulf War Series of Opec cuts
Iran/Iraq War
9/11
Conflict in Middle East
Nigeria
Asian Growth
US$ Weakness
Proved Reserves of Major Oil-Producing Countries, 2004
Major Producer (in rank order) Percentage of World Total
1 Saudi Arabia¹ 22.1%
2 Iran¹ 11.1%
3 Iraq¹ 9.7%
4 Kuwait¹ 8.3%
5 United Arab Emirates¹ 8.2%
6 Venezuela¹ 6.5%
7 Russia 6.1%
Includes crude oil, shale oil, oil sands and natural gas liquids
1 Opec members.Source The economist Pocket world in figures 2007
60% !
Drivers of Commodity Price Increases
New consumer economies in India, China, Russia
Investment demand Lagging supply increases:
Many years of low prices Structural under-investments in production
Oil price drivers: Politics, US$ (short run) Economics, supply and demand (long run)
The China-Effect
Expanded 10% p.a. for past three years Imports soared by 330% from $15.5bn per month in
2002, to $64.4bn in December 2005 Bought 22% of global base metal output in 2005
(5% in 1980) Doubled crude oil imports from five years ago
(2nd largest consumer) Need to raise living standard Population of 1.3bn, per capita income of $950 per year
(129th in world)
Asset Allocation
Local Equities, 2007
Economic Sector MC EAA JSE Sector
Mining and Quarrying 32% 35% Mining, Platinum, Gold, Coal
Finance, prop and bus. serv 30% 28%Banks, Insurance, Life Ass, Media & Pht, IT, Property, Support Serv
Manufacturing 12% 10%Auto, Basic Ind, Beverages, Chem, Elect, IT Hard, Pharm & Bio, Steel & Other
Personal Service 6% 5%Cyc Serv, Health, Leisure Ent, Non-cyc Serv, Person Care
Transport, storage and comm.
6% 6% Telecomm, Transport
Trade, hotels and restaurants
6% 4%Cyc Cons, Food & Drug, Gen Retail, House Goods, Non-cyc Cons
Electricity, gas and water 4% 3% Oil & Gas
Agri, Forestry and Fishing 3% 3% Food Prod
Construction 2% 6% Const & Build
100% 100%
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