433369666-The-Case-for-Investing-in-South-Africa
South Africa's investment proposal
South Africa's investment proposal
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22 |<br />
GLOBAL ECONOMIC DEVELOPMENTS<br />
• <strong>The</strong> world economy is fac<strong>in</strong>g significant threats that are underm<strong>in</strong><strong>in</strong>g its expansion momentum. Protectionist<br />
tendencies, <strong>in</strong>clud<strong>in</strong>g the trade dispute between the United States and Ch<strong>in</strong>a, along with ris<strong>in</strong>g geopolitical risks<br />
<strong>in</strong> various parts of the globe, are affect<strong>in</strong>g trade flows, output levels and <strong>in</strong>vestment activity.<br />
• Global growth may, however, be susta<strong>in</strong>ed above 3% over the medium-term, which would be relatively supportive<br />
of <strong>South</strong> <strong>Africa</strong>’s export per<strong>for</strong>mance.<br />
• Emerg<strong>in</strong>g market currencies have generally experienced considerable volatility <strong>in</strong> a world environment characterised<br />
by <strong>in</strong>creased uncerta<strong>in</strong>ty and risk aversion.<br />
• Inflationary pressures have been largely muted, permitt<strong>in</strong>g central banks <strong>in</strong> various advanced economies and<br />
certa<strong>in</strong> emerg<strong>in</strong>g markets to respond to ris<strong>in</strong>g risks to economic growth by lower<strong>in</strong>g <strong>in</strong>terest rates or by <strong>in</strong>dicat<strong>in</strong>g<br />
that accommodative monetary policy may prevail <strong>for</strong> some time.<br />
WORLD GDP GROWTH FOR SELECT REGIONS<br />
AND COUNTRIES<br />
GROWTH PROSPECTS FOR SELECT REGIONS<br />
AND COUNTRIES<br />
Percentage change <strong>in</strong> real GDP<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
-2<br />
World economy<br />
Advanced economies<br />
Emerg<strong>in</strong>g markets and develop<strong>in</strong>g economies<br />
<strong>South</strong> <strong>Africa</strong><br />
Forecast percentage change <strong>in</strong> real GDP<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
Sub-Saharan <strong>Africa</strong><br />
United States of America<br />
Euro area<br />
Ch<strong>in</strong>a<br />
-4<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
2012<br />
2013<br />
2014<br />
2015<br />
2016<br />
2017<br />
2018<br />
0<br />
2019F 2020F 2021F<br />
EXCHANGE RATE MOVEMENTS<br />
TRENDS IN BOND MARKET SPREADS IN<br />
SELECTED COUNTRIES<br />
18<br />
1 200<br />
16<br />
1 300<br />
600<br />
SA-US<br />
Turkey-US<br />
Exchange rate: ZAR per USD<br />
14<br />
12<br />
10<br />
Depreciation<br />
1 400<br />
1 500<br />
1 600<br />
Inverted EM currency <strong>in</strong>dex level<br />
JP Morgan EMBIG bond spreads<br />
*<br />
500<br />
400<br />
300<br />
Brazil-US<br />
8<br />
1 700<br />
200<br />
ZAR/USD exchange rate (Left hand side axis)<br />
Emerg<strong>in</strong>g markets (EM) currency <strong>in</strong>dex (Right hand side axis)<br />
6<br />
2012 2013 2014 2015 2016 2017 2018 2019<br />
1 800<br />
100<br />
2012 2013 2014 2015 2016 2017 2018 2019<br />
*EMBIG = Emerg<strong>in</strong>g Market Bond Index Global<br />
Sources: IDC analysis us<strong>in</strong>g data from the International Monetary Fund, the <strong>South</strong> <strong>Africa</strong>n Reserve Bank and Bloomberg
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