stanlib presentation. world economy under pressure
TRANSCRIPT
World economy under pressure:implications for South Africa
Kevin LingsEconomist
STANLIB
99
100
101
102
103
104
105
106
107
108
2006
2007
2008
2009
2010
2011
2012
Index Q1 2006 = 100
Euro-area GDP index (real)
%y/y
Germany, France and Italy GDP growth
-8.0
-7.0
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2006 2007 2008 2009 2010 2011 2012
Germany
Italy
France
70
80
90
100
110
120
05
06
07
08
09
10
11
12
Index
Germany
France
Greece
Italy
Spain
Euro-area economic sentiment
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
04 05 06 07 08 09 10 11 12
%
Euro-area
Euro-area unemployment rate
%
Euro-area government debt as % of GDP
50
75
100
125
150
175G
reece
Italy
Irela
nd
Port
ugal
Euro
-are
a
Spain
Fra
nce
Germ
any
Italy 2-year government bond yield
1.0
1.5
2.0
2.53.0
3.5
4.0
4.5
5.0
5.5
6.06.5
7.0
7.5
8.0
20
10
20
11
20
12
%, yield, daily%, yield, daily
Spain 2-year government bond yield
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
20
10
20
11
20
12
%, yield, daily%, yield, daily
Emerging markets 28.5
Government expenditure as % of GDPEurope
France 56.3
Denmark 56.0
Belgium 53.5
Italy 50.0
Netherlands 50.0
Greece 49.7
Portugal 48.7
Germany 45.6
Spain 43.6
Euro-area 49.4
US GDP
12.5
12.6
12.7
12.8
12.9
13.0
13.1
13.2
13.3
13.4
13.5
13.6
2006
2007
2008
2009
2010
2011
2012
$ trillion, constant prices
-10
-8
-6
-4
-2
0
2
4
6
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
%q/q
US real GDP growth
-20-18
-16-14-12
-10-8-6-4
-202
468
1012
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
%y/y
US leading indicator
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
06 07 08 09 10 11 12
%y/y, nominal
US retail sales
3-month ave
US retail sales
20
40
60
80
100
120
140
160
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Index
US consumer confidence
US fiscal cliff at end 2012
Tax benefits that are set to expire end 2012 $bn
Bush tax cuts, middle income earners 182Bush tax cuts, high income earners 56Unemployment insurance 34Payroll tax cut 109Alternative Minimum Tax 132Affordable Care Act 27Total 540
Debt ceiling debacle will result in automatic spending cut-backs
US House prices,%, m/m, nominal, S&P Case Shiller
US house prices
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
06 07 08 09 10 11 12
450550650750850950
1050115012501350145015501650175018501950205021502250
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Housing starts
Thousands, sa
US housing starts
China growth in GDP and industrial production%y/y %y/y
Industrial production (rhs)
GDP (lhs)
-30
-20
-10
0
10
20
30
40
50
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
% y/y, 3mnth ave
China exports
5
8
11
14
17
20
23
26
29
32
35
2006
2007
2008
2009
2010
2011
2012
%y/y%y/y
China growth in bank loans
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2009 2010 2011 2012
%
US and Euro-area consumer inflation
US
Euro-area
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2009 2010 2011 2012
%
China, Brazil, Russia consumer inflation
Brazil
China
Russia
South Africa consumer inflation
0
2
4
6
8
10
12
14
2006 2007 2008 2009 2010 2011 2012
% y/y
Global consumer inflation rate%y/y %y/y
1
2
3
4
5
6
7
8
9
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
$ per bushel
US corn price (Chicago)
Global interest rates% %
Emerging markets (rhs)
Developed markets (lhs)
Percentage points (Fed funds rate less core consumer inflation)
US real interest rates
-2.5
-1.5
-0.5
0.5
1.5
2.5
3.5
4.5
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Percentage points (Repo rates less consumer inflation)
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
06 07 08 09 10 11 12
South Africa real interest rates
South Africa household deposits
375
385
395
405
415
425
435
445
455
465
2010
2011
2012
R billion
+R74bn
South Africa growth in household deposits
3
4
5
6
7
8
9
10
11
12
13
2011
F M A M J J A S O N D 2012
F M A M
%y/y
SA GDP back well above previous highs
1600
1650
1700
1750
1800
1850
1900
1950
2006
2007
2008
2009
2010
2011
2012
Rand billion, constant prices
12.8
13.0
13.2
13.4
13.6
13.8
14.0
14.2
Q1 2008
Q2 2008
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Million
SA total employment
Still 580 000 below the previous peak
SA non-financial corporate deposits
250
300
350
400
450
500
550
2006
2007
2008
2009
2010
2011
2012R billion
17000
19000
21000
23000
25000
27000
29000
31000
33000
35000
37000
2006
2007
2008
2009
2010
2011
2012
Index, daily
South Africa equity market index
+95%
%
Government debt as % of GDP
30
55
80
105
130
155
Gre
ece
Italy
Irela
nd
Port
ugal
US
Euro
-are
a
Spain
UK
Fra
nce
Germ
any
South
Afr
ica
R billion, cumulative
Bonds
Net foreign purchases of South African bonds
-20
0
20
40
60
80
100
120
140
160
180
200
220
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
+R156bn
South Africa 10-year government bond yield
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
20
10
20
11
20
12
%, yield, daily%, yield, daily
-50100250400550700850
100011501300145016001750190020502200
20
08
20
09
20
10
20
11
20
12
$ billion
US Federal Reserve quantitative easing
US 10-year government bond yield
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
20
10
20
11
20
12
%, yield, daily%, yield, daily
% of GDP
US corporate cash on balance
7.0
7.3
7.5
7.8
8.0
8.3
8.5
8.8
9.0
9.3
9.5
9.8
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
2006
2007
2008
2009
2010
2011
2012
Index, daily
US S&P 500 equity index
+107%
-20
-15
-10
-5
0
5
10
15
20
25
2006
2007
2008
2009
2010
2011
2012
%y/y
SA leading indicator, %y/y
SA leading indicator
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
%, q/q, 4-quarter moving avearge, real
Consumer income
Consumer spending
SA consumer spending vs disposable income
SA exports to Europe
11.5
12.5
13.5
14.5
15.5
16.5
20
09
20
10
20
11
20
12
R billion, 6-month moving average
Government revenue and expenditure as % of GDP
24
25
26
27
28
29
30
31
32
33
34
35
05/0
6
06/0
7
07/0
8
08/0
9
09/1
0
10/1
1
11/1
2
12/1
3
13/1
4
14/1
5%
Fiscal years
Expenditure as % of GDP
Revenue as % of GDP
160
200
240
280
320
360
400
2007/0
8
2008/0
9
2009/1
0
2010/1
1
2011/1
2
2012/1
3
2013/1
4
2014/1
5Billions
Government salary payments
+6.4% per annum
+16.0% per annum
5
6
7
8
9
10
11
12
13
2009/1
0
2010/1
1
2011/1
2
2012/1
3
2013/1
4
2014/1
5%y/y
Increase in the spending on social grants
Public sector infrastructural spending
70.7 83.6
130.2
193.0 203.6177.8
226.6262.3
284.6 297.6
0
50
100
150
200
250
300
350
2005/0
6
2006/0
7
2007/0
8
2008/0
9
2009/1
0
2010/1
1
2011/1
2
2012/1
3
2013/1
4
2014/1
5Rbn
Public sector only spent 68% of budget
R844.5bn
40
45
50
55
60
65
2005
2006
2007
2008
2009
2010
2011
World ranking
World corruption perception index: South Africa
0
5
10
15
20
25
30
35
40
45
50
55
60
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Rbn
Transnet capital expenditure (R300bn over 7yrs)
Create 588 000 direct and in-direct job opportunities
Transnet capacity creation projects
● Iron ore export railway line expansion to 82.5m tons, up from 43m
● Coal railway line expansion to 97.5m tons, up from 65m
● Increase export manganese exports to 12m tons from 5m tons
● General rail freight capacity from 79.7m tons to 170.2m tons
● Container terminal at Coega
● Cape Town container port expansion
● Durban container port terminal berth deepening
● Transnet multi purpose product pipeline
SA non-financial corporate deposits
250
300
350
400
450
500
550
2006
2007
2008
2009
2010
2011
2012R billion
Thank you