433369666-The-Case-for-Investing-in-South-Africa

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SOUTH AFRICA AT A GLANCE: ECONOMIC INDICATORS
Measure Fast facts Key highlights
Gross domestic
product (GDP)
GDP growth
Consumer price
inflation
Interest rates
Exchange rate
Trade in goods
and services
• 2018: USD368.3-billion
(ZAR4.87-trillion)
• 2017: USD349.6-billion
(ZAR4.65-trillion)
• 2016: USD296.4-billion
(ZAR4.35-trillion)
• 2018: 0.8%
• 2017: 1.4%
• 2016: 0.4%
• 2000 to 2018 (average): 2.8% p.a.
• 2004 to 2007 average: 5.2% p.a.
• 2018: 4.6% (average)
• 2010 to 2018 average: 5.3%
Policy rate (repurchase rate):
• 2018: 6.58% (average)
• 21 October 2019: 6.5%
• 2018 average:
USD1.00 = ZAR13.23
• 21 October 2019:
USD1.00=ZAR14.75
• Exports in 2018:
USD110.1-billion (ZAR1.46-trillion)
• Imports in 2018:
USD 108.9-billion (ZAR1.44-trillion)
• South Africa has the 30 th -largest economy in the world (GDP
size on a PPP USD basis) and is one of Africa’s largest,
accounting for approximately 16% of the continent’s GDP.
• Small-, medium- and micro-enterprises contributed an
estimated 36% to GDP in 2017.
• Subdued growth since 2015 due to weak confidence, low
investment and employment creation, as well as subdued
global demand for some industrial commodities, which
weighed on the prices and volume demand for South
Africa’s primary export commodities basket.
• Implementation of key structural reforms currently underway
in sectors including mining, telecommunications and tourism
could significantly raise South Africa’s potential growth rate.
• Inflation expectations remain anchored well within the SA
Reserve Bank’s target band.
• Consumer price inflation expected to average 4.2% in 2019
(SA Reserve Bank).
• Compared to developed markets, South Africa’s relatively
higher interest rates offer attractive returns for yield-seeking
investors. The recent levels of South Africa’s prime lending
interest rates (banks’ unsecured lending rate to prime
borrowers) are as follows:
• 2018: 10.08% (average)
• 21 October 2019: 10.00%
• The rand is the 20 th most-traded currency globally, with over
USD21-billion traded daily.
• In 2018, Asia was the largest regional destination for South
African exports, accounting for 31.3% of total exports by
value (primarily mineral commodities), followed by the rest of
Africa (26.5%, mainly food products, beverages, machinery,
motor vehicles, minerals and agriculture products).
Foreign
investment
Portfolio investment inflows:
• 2018: USD6.8-billion (1.8% of GDP)
• 2010 to 2018 average:
3.8% of GDP
Fixed investment inflows:
• 2018: USD5.34-billion
(1.4% of GDP)
• 2010-2018 average: 1.1% of GDP
• South Africa was named the Offshoring Destination of the
Year at the 2016 Global Sourcing Association (GSA) Awards.
• Three of the best cities for investment expansion of
international companies in the biotechnology sector are
in South Africa - Johannesburg, Durban and Stellenbosch
(Financial Times, 2017).
• South Africa makes up approximately 5% of institutional
bond holders’ portfolios for equities and bonds.
Sources: Statistics South Africa, South African Reserve Bank (SARB), World Bank, EPFR, Bank for International Settlements, Department of Small Business Development, National Treasury,
Industrial Development Corporation (IDC) calculations