Economic Update Kevin Lings Economist November 2013

Economic UpdateKevin LingsEconomistNovember 2013

4.9 4.55.2 5.4

2.8

-0.6

5.3

3.93.2 2.9

3.6

-1

0

1

2

3

4

5

6

7

04 05 06 07 08 09 10 11 12 13 14

(%y/y)

World GDP growth (IMF)

3.6%Oct‘12

4.6%Oct‘12

3

GDP growth in emerging vs advanced economies

% q/q, saar (dashed lines are 2010/2012 averages)

Emerging markets

Advanced economies

United States GDP performance

98

100

102

104

106

108

110

112

114

116

118

120

122

124

2006

2007

2008

2009

2010

2011

2012

2013

Index, Q1 2006 = 100

US

-22

-20

-18

-16

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

2005

2006

2007

2008

2009

2010

2011

2012

2013

%y/y

US leading indicator

6

7

8

9

10

11

12

13

14

15

16

17

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

US$ trillion

US statutory limit on Federal Debt

US debt ceiling

US government debt

800

1000

1200

1400

1600

1800

2000

2200

2400

2600

2800

3000

3200

3400

3600

3800

2008

2009

2010

2011

2012

2013

$ billion$ billion

US Federal Reserve Total Assets

QE 1QE 2

QE 3

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

06 07 08 09 10 11 12 13

%y/y%y/y

Euro-area leading indicator

Euro-area: economic sentiment indicator

70

80

90

100

110

120

2005

2006

2007

2008

2009

2010

2011

2012

2013

Index, 100 = average

Core of Euro-area

Periphery of Euro-area

99

101

103

105

107

109

111

113

115

117

119

121

123

125

2006

2007

2008

2009

2010

2011

2012

2013

Index Q1 2006 = 100

Euro-area GDP index (real) vs US real GDP index

USA GDP

Euro-area GDP

7

8

9

10

11

12

13

14

15

2006

2007

2008

2009

2010

2011

2012

2013% unemployed

Youth unemployment rate in Germany

20

25

30

35

40

45

50

55

60

65

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

% unemployed

Youth unemployment rate in Greece

0.0

0.5

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

7.5

8.0

8.5

2010 2011 2012 2013

%

Developed vs Emerging market inflation rate

Emerging markets

Developed markets

-3.0

-2.5

-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 2013

%

US consumer inflation

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2009 2010 2011 2012 2013

%

Euro-area

Consumer inflation in the Euro-area

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

2010

2011

2012

2013%y/y

Japan consumer inflation rate

2% target set in Jan 2013

Headline inflation

Core inflation

0

1

2

3

4

5

6

07 08 09 10 11 12 13

%

UK

Euro-area

US

Euro-area, US, Japan and UK official interest rates

Japan

0

2

4

6

8

10

12

14

16

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

%, y/y, real terms

China real GDP growth

China rebalancing needed

303132333435363738394041424344454647484950

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

% of total China GDP

Fixed investment activity

Consumer activity

-2

-1

0

1

2

3

4

5

6

7

8

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 13 14

%y/y

Sub-Saharan Africa GDP growth

0 1 2 3 4 5 6 7 8 9 10 11 12

AngolaEquatorial Guinea

EthiopiaRwanda

ChadNigeria

MozambiqueSierra Leone

GhanaTanzania

UgandaDRC

ZambiaBurkina Faso

South Africa

%y/y, real GDP growth, average over 10 years

Sub-Saharan Africa fastest growing economiesPast 10 years

25

30

35

40

45

50

55

60

65

70

75

80

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

% of GDP

Sub-Saharan Africa Government Debt as % of GDP

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

320

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

$ billion

Sub-Saharan Africa net foreign direct investment

South Africa’s international perception

-3

-2

-1

0

1

2

3

4

5

6

7

8

2007

2008

2009

2010

2011

2012

2013

%, q/q, 4-quarter moving average, real

SA consumer disposable income

-3

-2

-1

0

1

2

3

4

5

6

7

8

2007

2008

2009

2010

2011

2012

2013

%, q/q, 4-quarter moving average, real

Consumer incomeConsumer spending

SA consumer spending vs disposable income

90

100

110

120

130

140

150

160

170

180

02 03 04 05 06 07 08 09 10 11 12 13

Index

SA manufacturing activity vs retail activity

SA retail activity

SA manufacturing activity

SA economic recovery has been consumption based, rather than production based

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

% of total

SA manufacturing production as % of GDP

-13

-12

-11

-10

-9

-8

-7

-6

-5-4

-3

-2

-1

0

1

2

3

4

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Rbn

SA trade balance – 12 month moving average

% over past three months. Personal loans

SA growth in consumer unsecured credit

0

1

2

3

4

5

2010 2011 2012 2013

-10

-5

0

5

10

15

20

25

2005

2006

2007

2008

2009

2010

2011

2012

2013

Index

SA consumer confidence (BER)

SA formal sector employment

8.00

8.10

8.20

8.30

8.40

8.50

8.60

2007

2008

2009

2010

2011

2012

2013

MillionStill 75 000 formal sector jobs below the peak

485

490

495

500

505

510

515

520

525

530

535

540

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

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Thousands

SA mining employment

-17-15-13-11

-9-7-5-3-113579

11131517192123

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

%q/q, annualised

Growth in fixed investment spending

-7

-5

-3

-1

1

3

5

7

9

06 07 08 09 10 11 12 13-20

-15

-10

-5

0

5

10

15

20

25%y/y%y/y

OECD leading indicator vs SA leading indicator

OECD leading indicator (lhs)

SA leading indicator (rhs)

%y/y%y/y

SA exports to Africa

2

3

4

5

6

7

8

9

10

11

12

13

14

2005

2006

2007

2008

2009

2010

2011

2012

2013

R billion, 6-month moving average

SA exports more to Africa than to North and South America combined

30

40

50

60

70

80

90

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

R Billions

SA travel receipts

World Soccer Cup 2010

10

20

30

40

50

60

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

R Billions

SA net travel account

Building plans passed – residential sector

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Rbn, constant prices, 12-month moving average

0

2

4

6

8

10

12

14

16

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

% y/y

SA headline CPI forecast

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

01 02 03 04 05 06 07 08 09 10 11 12 13 14

%

SA Interest Rate Forecast

Prime rate

Repo rate