{"id":74942,"date":"2016-07-24T09:53:15","date_gmt":"2016-07-24T07:53:15","guid":{"rendered":"http:\/\/www.myza.co.za\/sas-economy-not-all-doom-and-gloom\/"},"modified":"2016-07-24T09:53:15","modified_gmt":"2016-07-24T07:53:15","slug":"sas-economy-not-all-doom-and-gloom","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/sas-economy-not-all-doom-and-gloom\/","title":{"rendered":"SA\u2019s economy not all doom and gloom"},"content":{"rendered":"

SA\u2019s economy not all doom and gloom<\/a>: <\/p>\n

\"USB-Bram-ProfRoux\"<\/p>\n

USB Alumni Association Eastern Cape Chapter – Interim Chair, Mr Bram Davies Photo: Michael Sheehan<\/p>\n<\/div>\n

WHILE 2016 might turn out to be the most difficult year for South African consumers in two decades, next year may bring \u201cmoderate improvement\u201d to the economy \u2013 although nowhere near the elusive 6% growth target.<\/p>\n

Despite South Africans\u2019 tendency to focus on the negative, the local economy still has some positive aspects, economist Prof Andr\u00e9 Roux, director of the Institute for Futures Research at the University of Stellenbosch Business School (USB), said today (Weds, 20 July 2016).<\/p>\n

He shared his views on \u201cThe South African Economy \u2013 Trials, Tribulations and Triumphs\u201d at a business breakfast hosted by the Eastern Cape chapter of USB Alumni in Port Elizabeth.<\/p>\n

The positives in post-1994 South Africa, said Roux, included more stable and higher average levels of growth, overall lower levels of inflation, and significant inflows of capital versus the outflows of the pre-democratic, sanctions era. GDP per capita had risen since 1994, although it was still below the levels of other emerging market economies.<\/p>\n

The number of people in the lower Living Standards Measurement (LSM) categories was declining, and increasing in the higher categories, he said. Roux, however, emphasised that unemployment remained \u201cchronically high\u201d while South Africa still had one of the most unequal distributions of income in the world and both consumer and business confidence were in decline.<\/p>\n

Pointing to the reasons for the gloomy situation, Roux said external factors beyond the country\u2019s control played an important role. These included sluggish performance in Western Europe, still the country\u2019s main export partner, while developments in China and North Korea, terrorist attacks in Europe, Brexit, and the American presidential race were making the world \u201ca nervous place right now \u2013 and remember that investors are risk-averse\u201d.<\/p>\n

After the worst recession in living memory, Roux said the global economy was \u201cdrifting, treading water and going nowhere fast\u201d. Although there might be a slight improvement this year, it was \u201chardly worth mentioning,\u201d he said.<\/p>\n

\u201cThe slow-down is worst for countries with an emphasis on exports of natural resources, and those are the backbone of African economies. A slow-down in big markets like China sees commodity prices slumping, and affects African exporters,\u201d he said.<\/p>\n

Added to global economic woes, the drought has also taken its toll, with South Africa soon to become a nett importer of food which will impact on food prices and add to the inflationary pressures that are building up.<\/p>\n

\u201cA few mistakes\u201d in the steering of the economy had led to the situation of South Africa being \u201con the brink of junk bond status\u201d and government having little room to use fiscal policy to stimulate the economy, he said.<\/p>\n

From healthy levels in the early 2000s, government debt levels had climbed in the past few years and credit agencies were \u201cgetting concerned\u201d about South Africa\u2019s budget deficit, with debt levels now higher than in other emerging markets.<\/p>\n

Particularly worrying, he said, was that South Africa was not borrowing to improve infrastructure but to pay civil servants\u2019 wages and social grants, and that at both individual and government level \u201cwe have become a nation of debtors\u201d.<\/p>\n

\u201cSouth Africa has become a capital-hungry nation, reliant on foreign investment, but the trouble is that the rest of the world is not so keen anymore,\u201d he said, pointing to government debt, sliding credit ratings, and labour market and productivity concerns.<\/p>\n

On the short-term outlook, Roux said he expected continued tight fiscal and monetary policy, rising interest rates, and no growth in job creation or consumer expenditure with consumers focusing instead on servicing their debt.<\/p>\n

\u201cTechnically, we might avoid a recession, but it feels like it anyway. However, if we can weather this year\u2019s storm we could look forward to moderate improvement next year,\u201d he said.<\/p>\n

Looking longer-term, Roux said South Africa\u2019s latest ranking of 49 out of 144 countries on the Global Competitiveness Index was \u201cnot great, but it has actually been improving over the last five years\u201d and this signalled a positive direction.<\/p>\n

However, while the country rates well for the strength of its financial infrastructure and progressive legal framework, he said education remained the greatest stumbling block to South Africa\u2019s advancement.<\/p>\n

Improving education and developing the technological skills for the country to participate in the \u201c4th industrial revolution\u201d were the key to South Africa achieving positive growth, he said, along with removal of barriers hampering the development of the country\u2019s entrepreneurial spirit.<\/p>\n

Welcoming guests, chapter chairman Bram Davies said the USB Alumni in the Eastern Cape was focused on offering networking opportunities and access to current knowledge and trends to support their professional growth. Further speakers and events are lined up for later in the year.<\/p>\n

\n
\"USB-ProfRoux-01\"<\/p>\n

Prof Andre Roux addressed a business breakfast hosted by the USB Alumni Association Eastern Cape Chapter at the PE St George’s Club Photo: Michael Sheehan<\/p>\n<\/div><\/div>\n

\n
\"USB-committee\"<\/p>\n

The USB Alumni Eastern Cape Chapter with Prof Andre Roux after a recent business breakfast hsoted by the EC Chapter. (LtR) Ms Michelle Nicholls, Mr Bram Davies (Interim Chair), Prof Roux, Mr Greg Clack and Mr Pieter Rossouw Photo: Michael Sheehan<\/p>\n<\/div><\/div>\n

YouTube<\/strong>:<\/p>\n

https:\/\/www.youtube.com\/user\/StellenboschBSchool<\/p>\n

CLICK HERE to submit your press release to MyPR.co.za.<\/p>\n

Source:<\/strong> MyPR<\/a><\/small>
\n<\/p>\n

Submit your own Press Release<\/a> or get free content for your publication.<\/p>\n

Video – How to post your Press Release on MyPR:<\/strong>
\n