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South Africa is Flirting WithRecession and Credit DowngradeAn Economic Update
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-4
-3
-2
-1
0
1
2
3
4
3.2 2.7 3.1 2.8
0.2
-3.4
3.11.7 1.2 1.1 1.8 2.0 1.8
%y/y
Developed Markets GDP Annual Growth Rate
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2
3
4
5
6
7
8
9
7.5 7.38.2 8.7
5.8
3.1
7.56.3
5.2 5.0 4.63.8 3.6
%y/y
Emerging Markets GDP Annual Growth Rate
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-5-4-3-2-10123456
%q/q
US Real GDP Growth – 4-Quarter Average
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-3
-2
-1
0
1
2
3
4
5%q/q
US Real Consumer Spending Growth (4-Quarter Average)
2011
2012
2013
2014
2015
2016
2.00
2.25
2.50
2.75
3.00
3.25
3.50
3.75
4.00
4.25
4.50$/gallon
US Gasoline Price (National Weekly Average)
-46%
US Vehicle Miles Travelled
2940000
2960000
2980000
3000000
3020000
3040000
3060000
3080000
3100000
3120000
3140000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015Millions of Miles, 12-month moving average
Percentage points, 4-quarter moving average
US Contribution of Government Spending to GDP Growth
2011
2012
2013
2014
2015
-0.8
-0.6
-0.4
-0.2
0.0
0.2
Percent of total employment
US Government Employment as % of Total
1975
1980
1985
1990
1995
2000
2005
2010
2015
15
16
17
18
19
20
2014
A M J A N D J J S O N 2016
1.03
1.07
1.11
1.15
1.19
1.23
1.27
1.31
1.35
1.39USD
US Dollar per Euro
-22%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-25
-20
-15
-10
-5
0
5
10
15
20
25%y/y
US Monthly Growth in Exports
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-16-14-12-10
-8-6-4-202468
10
%y/y
US Industrial Production
193919411943194519471949195119531955195719591961196319651967196919711973197519771979198119831985198719891991199319951997199920012003200520072009201120132015
5
9
13
17
21
25
29
33
37
%
US Manufacturing Employment As % Of Total Employment
US Oil Rig CountNumber of rigs
2012
2013
2014
2015
2016
500600700800900
10001100120013001400150016001700
2014
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2015
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2016
-0.5
0.0
0.5
1.0
1.5
2.0
2.5%y/y
US Consumer Inflation
Headline inflation
Core inflation
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0%
US Official Interest Rates
FOMC is expecting four hikes of 0.25% each in 2016Market is expecting two hikes of 0.25% each in 2016
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
18202224262830323436384042
% of world GDP
Emerging Economies % of World GDP
2007
2008
2009
2010
2011
2012
2013
2014
2015
-5-4-3-2-10123456789
10%y/y
Brazil GDP Growth
Brazil GDP
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
60
70
80
90
100
110
120
Index
Brazil Business And Consumer Confidence
Consumer confidence
Business confidence
2011
2012
2013
2014
2015
2016
50
52
54
56
58
60
62
64
66
68
% of GDP
Brazil Gross Government Debt as % of GDP
2011
2012
2013
2014
2015
2016
1
2
3
4
5
6
7
8
9
10
11% of GDP
Brazil Government Overall Deficit as % of GDP
05
06
07
08
09
10
11
12
13
14
15
-3
-2
-1
0
1
2
3
4
5
6
7
8%y/y
South Africa Real GDP Growth Year-on-Year
South Africa - Manufacturing Production
05 06 07 08 09 10 11 12 13 14 15-17-15-13-11
-9-7-5-3-11357
%y/y, 12-month moving average
The combination of:Agriculture, Mining, Manufacturing, ConstructionElectricity, and water in recession
SA Agricultural Districts Declared Drought DisasterAreas
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-5-3-113579
111315
%y/y
South Africa Retail Sales – 12 Month Moving Ave
South Africa Food Cereal Inflation
2013
2014
2015
2016
-20
0
20
40
60
80
% y/y
South Africa Headline CPI Forecast
2009
2010
2011
2012
2013
2014
2015
2016
2
3
4
5
6
7
8
9% y/y
SA Becoming Investment Grade After 1994
In 1994 SA had to overcome a number of important constraints before attaining an investment grade rating:
➜ High degree of political uncertainty
➜ Rapid increase in government debt
➜ Extremely low level of foreign exchange reserves
➜ Double digit inflation
SA Government Gross Loan Debt as % of GDP
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 0920
25
30
35
40
45
50
55%
81 86 91 96 01 06 11 1605
10152025303540455055$bn
SA Foreign Exchange Reserves
SA Prime Interest Rate
90 91 92 93 94 95 96 97 98 99 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
7
911
131517
1921
232527
%, Inflation target introduced in February 2000
SA Government Gross Loan Debt as % of GDP
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 15 16 17 1810
15
20
25
30
35
40
45
50
55%
SA Budget Deficit as % of GDP
'02/03
'03/04
'04/05
'05/06
'06/07
'07/08
'08/09
'09/10
'10/11
'11/12
'12/13
13/14
14/15
15/16
16/17
17/18
18/19
-7-6-5-4-3-2-10123
-0.8-2.5 -1.9
-0.61.2 1.7
-1.1
-6.5
-4.3 -3.6 -4.1 -3.8 -3.6 -3.9 -3.2 -2.8 -2.4
% Fiscal years
SA Primary Budget Balance as % of GDP
10/11
11/12
12/13
13/14
14/15
15/16
16/17
17/18
18/19
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
-1.5-0.9
-1.3-0.7 -0.4 -0.6
0.4 0.71.2
% Fiscal years
SA Government Net Domestic Long-term Bonds issued
89/90
90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
17/18
18/19
-20
0
20
40
60
80
100
120
140
160Rbn Fiscal years
Growth in Fixed Investment Spending by Private Sector
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-20
-15
-10
-5
0
5
10
15%q/q, 4-quarter moving average
