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Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
Retail indaba august 2013
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Retail indaba august 2013

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  • 1. South Africa Economic Overview & Prospects 2013 and beyond August 2013
  • 2. The key ingredients • Rising fixed investment activity • Increased employment A growing economy: • Rising disposable income • Rising household wealth • Growing confidence • Increased willingness to lend and borrow • Increased willingness to spend Rising employment 1 02 September 2013
  • 3. 2 02 September 2013 SA economy is growing, but also increasing running out of fuel
  • 4. The economy is struggling to gain momentum because some key sectors are not performing 3 02 September 2013 Manufacturing has fared better but not great This sector is holding the whole economy back Mining is in the doldrums
  • 5. So what is troubling producers: • Recession in the Eurozone • Growth in China is moderating A sluggish & patchy world economy: • Run away electricity costs (2007-2012: +230%) • Rising unit labour costs (above-inflation wage growth, fading productivity, more & violent strikes) • Insufficient power, transport, logistics infrastructure • Poor service delivery, red tape, corruption Surging production costs 4 02 September 2013
  • 6. So the private sector has been reluctant to expand capacity 5 02 September 2013
  • 7. And they have been equally hesitant to expand their labour force 6 02 September 2013
  • 8. Most private industries have not created any new jobs since 2008 7 02 September 2013
  • 9. Government consumption expenditure is still driving growth, but is not sustainable 8 02 September 2013
  • 10. Because government ran out of funds some four years ago 9 02 September 2013
  • 11. And the world has taken note ■ Ratings downgrades ■ Moody’s A3 to Baa on 27 September with negative outlook ■Lack of institutional strength ■Shrinking fiscal space ■Negative investment climate due to infrastructure shortfalls, high labour costs despite high unemployment and increased concerns over future political stability ■ S&P BBB from BBB+ on 12 October, negative outlook ■More emphasis on social tensions spilling over into worse forecasts
  • 12. 11 02 September 2013 Growth in the total wage bill will be contained
  • 13. 12 02 September 2013 So growth in disposable income is slowing
  • 14. 13 02 September 2013 And households are still too indebted & vulnerable
  • 15. General government is at least accelerating spending on social infrastructure 14 02 September 2013
  • 16. 15 02 September 2013 The SARB’s problem is that growth is modest, but becoming increasingly unsustainable Source: SARB QB June 2012
  • 17. The good news is that we are still getting the capital inflows we need, but much depends on government 16 02 September 2013
  • 18. …which undermines the rand and fuels inflation 17 02 September 2013
  • 19. But overall the subdued growth rate will probably set the tone for some time to come, keeping interest rates flat 18 02 September 2013
  • 20. Forecasts 2008 2009 2010 2011 2012 2013 2014 2015 Economic growth - Annual growth rates (%) Consumer spending 2.2 -1.6 4.4 4.8 3.5 2.7 3.2 3.5 Fixed investment 13.0 -4.3 -2.0 4.5 5.7 4.9 5.2 6.2 Exports 1.8 -19.5 4.5 5.9 0.1 2.7 4.2 4.5 Imports 1.5 -17.4 9.6 9.7 6.3 7.8 6.8 7.0 GDP 3.6 -1.5 3.1 3.5 2.5 2.0 3.1 3.4 Balance of Payments Current Account (R'bn) -161.9 -97.1 -75.0 -98.8 -197.6 -234.1 -236.1 -237.7 As % of gdp -7.2 -4.0 -2.8 -3.4 -6.3 -6.9 -6.3 -5.8 Interest rates - Year-end rates 3-month JIBAR 11.5 7.3 5.7 5.7 5.1 5.2 6.3 7.7 Prime 15.0 10.5 9.0 9.0 8.5 8.5 9.5 11.0 Long bond 7.3 9.1 8.1 8.1 6.8 7.7 8.3 7.2 Exchange rates - Annual averages Rand/US$ 8.26 8.44 7.33 7.30 8.21 9.75 10.14 10.38 Rand/Euro 12.10 11.75 9.76 10.20 10.62 12.68 13.19 13.69 Yen/Rand 12.51 11.08 11.97 10.91 9.75 10.05 10.10 10.07 Inflation - Annual averages New CPI 11.3 7.1 4.3 5.0 5.7 5.9 5.8 5.9
  • 21. The end, thank you, and good luck 20 02 September 2013
  • 22. 21 02 September 2013 And the plans for next three years remain ambitious
  • 23. 22 02 September 2013 Weak exports are still a major constraints on both confidence and performance on the production side Source: SARB QB June 2012
  • 24. 23 02 September 2013 On balance, 2013 is expected to be very similar to 2012 Source: IMF WEO July 2013 Countries and regions Forecasts Forecasts July 2013 April 2013 2008 2009 2010 2011 2012 2013 2014 2013 2014 2015 2016 World 2.8 -0.6 5.2 3.9 3.1 3.1 3.8 3.3 4.0 4.4 4.5 Advanced economies 0.1 -3.5 3.0 1.7 1.2 1.2 2.1 1.2 2.2 2.6 2.6 US -0.3 -3.1 2.4 1.8 2.2 1.7 2.7 1.9 3.0 3.6 3.4 Japan -1.0 -5.5 4.7 -0.6 1.9 2.0 1.2 1.6 1.4 1.1 1.2 Euro area 0.4 -4.4 2.0 1.5 -0.6 -0.6 0.9 -0.3 1.1 1.4 1.6 Germany 0.8 -5.1 4.0 3.1 0.9 0.3 1.3 0.6 1.5 1.3 1.3 UK -1.0 -4.0 1.8 1.0 0.3 0.9 1.5 0.7 1.5 1.8 1.9 Emerging and developing 6.1 2.7 7.6 6.2 4.9 5.0 5.4 5.3 5.7 6.0 6.1 Developing Asia 7.9 6.9 10.0 7.8 6.5 6.9 7.0 7.1 7.3 7.6 7.7 China 9.6 9.2 10.4 9.3 7.8 7.8 7.7 8.0 8.2 8.5 8.5 India 6.2 5.0 11.2 6.3 3.2 5.6 6.3 5.7 6.2 6.6 6.9 Middle East and N Africa 5.2 3.0 5.5 3.9 4.4 3.1 3.7 3.1 3.7 4.5 4.6 Sub-Saharan Africa 5.6 2.7 5.4 5.4 4.9 5.1 5.9 5.6 6.1 5.9 5.7 South Africa 3.6 -1.5 3.1 3.5 2.5 2.0 2.9 2.8 3.3 3.4 3.3 Angola 13.8 2.4 3.4 3.9 8.4 7.0 6.7 6.2 7.3 7.0 6.7 Nigeria 6.0 7.0 8.0 7.4 6.3 7.0 7.0 7.2 7.0 7.0 7.0 Zimbabwe -17.8 8.9 9.6 10.6 4.4 5.5 5.5 5.0 5.7 5.5 5.5 Namibia 3.4 -1.1 6.6 4.8 4.0 4.3 4.3 4.2 4.0 4.3 4.3 Latin America 4.2 -1.5 6.1 4.6 3.0 3.0 3.4 3.4 3.9 3.9 3.9 Brazil 5.2 -0.3 7.5 2.7 0.9 2.5 3.2 3.0 4.0 4.1 4.2 Mexico 1.2 -6.0 5.3 3.9 3.9 2.9 3.2 3.4 3.4 3.3 3.3 Central & Eastern Europe 3.1 -3.6 4.6 5.4 1.4 2.2 2.8 2.2 2.8 3.3 3.6 Russia 5.2 -7.8 4.5 4.3 3.4 2.5 3.3 3.4 3.8 3.7 3.6
  • 25. 24 02 September 2013 Hugely unsustainable public sector debt will continue to constrain economic growth in the Eurozone and most advanced economies Source: IMF WEO Oct 2012
  • 26. 25 02 September 2013 SA highly exposed to the weakest spot in the world economy – the Eurozone Agriculture: 37% Manufacturing: 24.7% Mining: 19.5%
  • 27. And central banks are doing their best to push liquidity – especially in Japan where “Abenomics” has taken hold
  • 28. 27 02 September 2013 Softer growth forecasts have hurt international commodity prices Source: INET
  • 29. The gold price has been under huge pressure 28 02 September 2013
  • 30. Global food prices are easing 29 02 September 2013
  • 31. But global oil prices have remained sticky on account of the troubles in Egypt and Syria 30 02 September 2013
  • 32. 31 02 September 2013 Growth in domestic spending is increasingly artificial Source: SARB QB June 2012
  • 33. Difficult conditions for producers have implications for capital expenditure 32 02 September 2013
  • 34. 33 02 September 2013 In advanced economies, conditions remain weak and mixed
  • 35. 34 02 September 2013 But it is really the sharper than expected slowdown in emerging markets that are behind the downward revisions

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