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%

www.efgroup.co.za