Economic outlook. Trading South Africa 12 March 2014

Transcription

1 Economic outlook 12 March 2014 Analyst certifications and important disclosures are in the disclosure appendix. For other important disclosures, please refer to the disclosure & disclaimer at the end of this document

2 Contents 1 Section Page 1. The global backdrop 2 2. South African economy: 6 3. : malaise to persist 51

3 Source : Standard Bank Library Private and confidential The global backdrop

4 Global growth 3 North America 2.2 (2.1) Western Europe 0.6 (-0.4) Eastern Europe 2.5 (2.3) Middle East/North Africa 3.4 (2.3) Japan 1.1 (1.9) Key: Per cent and above * 2013 growth in brackets Sources: IMF, SBR Latin America 3.0 (2.7) Sub-Saharan Africa 5.8 (5.0) Asia (excl Japan ) 6.3 (6.3)

5 4 SA economy slow recovery in relation to other EMs & SSA 7 6 % y/y Global Advanced economies Developing economies Sub-Saharan Africa South Africa GDP Sources: IMF, SBR

6 The great decoupling came to nought 5 Emerging Markets not immune to Developed Markets fate 10 8 % y/y Global GDP growth Advanced economies Emerging economies Source : The Economist Source : IMF

7 Private and confidential SOUTH AFRICA

8 Fiscal Deficit as % of GDP (2013 est) 7 The worry of twin deficits Russia Turkey -1 Strong Indonesia Brazil Mexico -2 Romania Czech Republic -3 Hungary Philippines SA Poland -4 Israel Malaysia Ukraine Serbia India Vulnerable Current Account as % of GDP (2013 est) -8 Sources: Bloomberg, SBR

9 8 SA demand drivers 120 Q2:09 = Households consumption expenditure Government consumption expenditure Gross fixed capital formation Sources: SARB, SBR

10 9 SA consumer finances 14 Annual rate/ % Real household income Households: Credit share in total spending Sources: SARB, SBR

11 10 Consumer spending by type Q2:09 = Durables Semi-durable Non-durables Services Sources: SARB, SBR

12 11 Capital spending by type 180 Q2:09 = Residential buildings Construction works Non-residential buildings Transport equipment Machinery and other equipment Sources: SARB, SBR

13 12 Foreign trade 150 Q2:09 = Exports of goods and services Imports of goods and services Sources: SARB, SBR

14 13 Higher inflation and interest rate profile expected in 2014 % CPI Prime rate Upper target Lower target Sources: SARB, SBR

15 Private and confidential SA trade

16 15 SA s bi-directional trade Source: SARB

17 16 SA s exports to the world (2000 figures in parentheses) Sources: Quantec, SBR

18 SA exports to the world 17 Exports to the world 80 % y/y Total 6 per. Mov. Avg. (Total) Commodity exports 12 mma % y/y mma % y/y Mineral products Machinery & mechanical appliances Vehicles, aircraft & vessels Precious & semi-precious metals & stones Base metals Commodity exports Commodity exports Sources: Quantec, SBR Pulp of wood 3% Vegetable product 3% Prepared foodstuffs, beverages & tobacco 5% Chemical products 7% Textiles Vehicles, aircraft & vessels 9% Machinery & mechanical appliances 10% Other 8% Precious & semiprecious metals & stones 23% Base metals 1 Mineral products 16% Prepared foodstuffs, beverages & tobacco 3% Machinery & mechanical appliances 8% Vehicles, aircraft & vessels 10% Vegetable product Chemical products 6% Plastics & rubber Base metals 13% Pulp of wood Other Mineral products 26% Precious & semi-precious metals & stones 2

19 18 SA s imports from the world (2000 figures in parentheses) Asia 46% (36%) Europe 30% (43%) Africa 1 () Americas 10% (15%) Oceania (3%) Sources: Quantec, SBR

20 SA imports from the world 19 Imports from the world 80 % y/y Total 6 per. Mov. Avg. (Total) Commodity imports mma % y/y Mineral products Machinery & mechanical appliances Vehicles, aircraft & vessels Chemical products Commodity imports Commodity imports Sources: Quantec, SBR Optical & photographic equipment Plastics & rubber Base metals Precious & semiprecious metals & stones 3% Textiles 3% Special classification of original equipment Vehicles, aircraft 8% & vessels 8% Other 1 Chemical products 11% Machinery & mechanical appliances 28% Mineral products 15% Vehicles, aircraft & vessels 10% Prepared foodstuffs, beverages & tobacco 3% Plastics & rubber Base metals 5% Original eqipment 6% Textiles 3% Chemical products 9% Optical & photographic equipment Other 11% Machinery & mechanical appliances 2 Mineral products 23%

21 Private and confidential Trade: The Americas

22 21 GDP US and Canada Canada 2. Key: Per cent and above US 2.6% Sources: IMF, SBR

23 22 GDP Latin America and the Caribbean Key: Per cent and above Sources: IMF, SBR

24 Trade deficit with the Americas likely to persist Trade balance with the Americas- Rbn Exports to and imports from the Americas - % y/y 23 5 Rbn 90 % y/y Americas Exports Imports Sources: Quantec, SBR

25 Export growth pedestrian 24 Exports to the Americas Exports to the Americas Oceania Americas 1 Not allocated 15% Asia 23% Europe 23% Africa 18% Not allocated 11% Americas 1 Oceania 1% United States 75.8% Canada 3.9% Brazil 7.8% Mexico 5.6% Africa 13% Europe 33% Asia 35% Argentina 2. Other 4.7% Sources: Quantec, SBR

26 US the major recipient of exports to the Americas 25 Imports from the Americas Imports from the Americas Oceania 3% Not allocated 1% Oceania Africa Americas 15% Asia 36% Europe 30% Africa 1 Not allocated 0% United States 61.8% Americas 10% Brazil 13.7% Mexico 6.1% Argentina 8.5% Europe 43% Asia 46% Canada 5.9% Other 4.0% Sources: Quantec, SBR

27 American demand for vehicles climbs 26 Export commodities Export commodities The global backdrop SA: slow the new normal? Optical & photographic equipment Miscellaneous manufactured articles 6% Arms & ammunition 1% 5% Works of art Footwear & headgear 1% Animal or vegetable fats & oils 0% Special classification of original equipment 0% Prepared foodstuffs, beverages, tobacco Plastics and rubber Vegetable products 5% Optical and photographic equipment Other Wood products 10% Raw hides & skins, leather 10% Stone, plaster & cement 11% Animal products 11% Vegetable product 26% Plastics & rubber 15% Machinery & mechanical appliances 9% Chemical products 10% Mineral products 11% Base metals 16% Vehicles, aircraft & vessels 2 Precious and semi precious metals and stones 17% Sources: Quantec, SBR

28 Imports dominated by machinery 27 Import commodities Imports commodities Pulp of wood 3% Other 1 Prepared foodstuffs, beverages & tobacco Plastics & rubber Base metals Machinery & mechanical appliances 3 Vegetable product Original equipment 5% Base metals 3% Plastics & rubber Mineral products 5% Other 9% Machinery & mechanical appliances 29% Vegetable product Mineral products Optical & photographic equipment 7% Vehicles, aircraft & vessels 1 Chemical products 1 Optical & photographic equipment 5% Prepared foodstuffs, beverages & tobacco 7% Chemical products 11% Vehicles, aircraft & vessels 18% Sources: Quantec, SBR

29 Private and confidential Trade: Europe

30 29 GDP Europe Key: Per cent and above Sources: IMF, SBR

31 Trade balance deep in deficit 30 Trade balance with Europe- Rbn Exports to and imports from Europe- % y/y 0 Rbn 50 % y/y Europe Exports Imports Sources: Quantec, SBR

32 Exports to Europe decline over the years 31 Exports to the Americas Exports to the Americas Oceania Not allocated 15% Asia 23% Americas 1 Not allocated 11% Oceania 1% Germany 23.3% Americas 1 Africa 18% Europe 23% UK 16. Netherlands 15.1% Belgium 9% Switzerland 8.7% Africa 13% Europe 33% Asia 35% Other 27.6% Sources: Quantec, SBR

33 Imports follow trend 32 Imports from the Americas Imports from the Americas Oceania 3% Not allocated 1% Not allocated 0% Oceania Africa Americas 15% Asia 36% Africa 1 Americas 10% Germany 33.7% UK 11.5% Europe 30% Italy 8. France 7.8% Netherlands 5.9% Europe 43% Asia 46% Other 32.6% Sources: Quantec, SBR

34 Europe s demand for minerals improves 33 Export commodities Export commodities Prepared foodstuffs, beverages & tobacco Chemical products Miscellaneous manufactured articles Other 1 Vegetable product 6% Machinery & mechanical appliances 8% Other unclassified goods 10% Precious & semiprecious metals & stones 15% Base metals 11% Mineral products 1 Vehicles, aircraft & vessels 1 Chemical products Wood products 1% Prepared foodstuffs, beverages, tobacco Vegetable products 7% Machinery & mechanical appliances 11% Base metals 11% Plastics and rubber 1% Other 5% Vehicles, aircraft and vessels 13% Precious and semi precious metals and stones 23% Mineral products 20% Sources: Quantec, SBR

35 SA demand for machinery on the backfoot 34 Import commodities Imports commodities Stone, plaster & cement Pulp of wood 3% Optical & photographic equipment Base metals Precious & semiprecious metals & stones Plastics & rubber 5% Other 9% Vehicles, aircraft & vessels 8% Original equipment 9% Chemical products 1 Machinery & mechanical appliances 38% Pulp of wood 3% Prepared foodstuffs, beverages & tobacco 3% Optical & photographic equipment Mineral products Plastics & rubber Base metals 5% Original equipment 10% Other 9% Chemical products 1 Machinery & mechanical appliances 29% Vehicles, aircraft & vessels 15% Sources: Quantec, SBR

36 Private and confidential Trade: Asia

37 36 GDP Asia Key: Per cent and above Sources: IMF, SBR

38 SA-Asia trade: deficit grows 37 Trade balance with Europe- Rbn Exports to and imports from Europe- % y/y 0 Rbn 50 % y/y Asia Exports Imports Sources: Quantec, SBR

39 Improved ties with Asia 38 Exports to the Americas Exports to the Americas Oceania Not allocated 15% Asia 23% Americas 1 Not allocated 11% Oceania 1% China 33.1% Americas 1 Africa 18% Asia 35% Japan 18.1% India 12.3% Korea 5.5% Other 26. Africa 13% Europe 33% Europe 23% Hong Kong 4.8% Sources: Quantec, SBR

40 bi-directional relational strengthens 39 Imports from the Americas Imports from the Americas Oceania 3% Not allocated 1% Oceania Not allocated 0% Africa Americas 15% Asia 36% Africa 1 Americas 10% China 31.1% Asia 46% S. Arabia 17. Japan 9.5% India 9. Thailand 5.8% Europe 43% Europe 30% Other 25.8% Sources: Quantec, SBR

41 Exports of minerals more than doubles 40 Export commodities Export commodities Vehicles, aircraft & vessels 5% Wood products 3% Vegetable product 3% Other 7% Vegetable products 3% Machinery & mechanical appliances Vehicles, aircraft and vessels 3% Wood products Prepared foodstuffs, beverages, tobacco Textiles 1% Other 3% Pulp of wood 5% Prepared foodstuffs, beverages & tobacco 5% Precious & semiprecious metals & stones 6% Chemical products 6% Mineral products 15% Base metals 30% Other unclassified goods 15% Chemical products Precious and semi precious metals and stones 1 Base metals 16% Mineral products 50% Sources: Quantec, SBR

42 Two commodities make up more than half of imports 41 Import commodities Imports commodities Miscellaneous manufactured articles Footwear & headgear Optical & photographic equipment 3% Other 10% Miscellaneous manufactured articles Other 9% Base metals 3% Plastics & rubber Vehicles, aircraft & vessels Plastics & rubber Chemical products Textiles 6% Special classification of original equipment 11% Mineral products 31% Machinery & mechanical appliances 2 Original equipment 6% Textiles 5% Chemical products 7% Base metals 5% Vehicles, aircraft & vessels 8% Mineral products 28% Machinery & mechanical appliances 2 Sources: Quantec, SBR

43 Private and confidential Trade: Africa

44 43 GDP Africa Key: Per cent and above Sources: IMF, SBR

45 44 Continued dynamism 14 Output growth, % Oil exporters Middle income countries Low income countries Sources: IMF, SBR

46 Sub-Saharan Africa 45 Continued dynamism 12 Contributions to output growth Private consumption Public consumption Investment Net exports Discrepancy GDP growth Sources: IMF, SBR

47 Africa s niche a trade surplus 46 Trade balance with Africa - Rbn Exports to and imports from Africa - % y/y 50 Rbn 90 % y/y Africa Exports Imports Sources: Quantec, SBR

48 Exports to Africa rising as Africa s footprint rises 47 Exports to Africa Exports to Africa Oceania Americas 1 Not allocated 15% Asia 23% Europe 23% Americas 1 Not allocated 11% Oceania 1% Zambia 16.3% Africa 18% Mozambique 15.6% Zimbabwe 15. DRC 9.3% Angola 7.1% Other 36.5% Africa 13% Europe 33% Asia 35% Sources: Quantec, SBR

49 Imports hold equal stature 48 Imports from Africa Imports from Africa Oceania 3% Not allocated 1% Africa Americas 15% Asia 36% Europe 30% Americas 10% Not allocated 0% Africa 1 Oceania Nigeria 37. Angola 29.1% Mozambique 12. Zambia 3.9% Europe 43% Asia 46% Zimbabwe 3.7% Other 13.7% Sources: Quantec, SBR

50 Exports are rich with metals and minerals 49 Export commodities Export commodities Vegetable product Pulp of wood 5% Textiles Other 10% Machinery & mechanical appliances 16% Plastics and rubber 6% Vegetable products 3% Animal products Wood products 3% Other 8% Machinery & mechanical appliances 20% Plastics & rubber 6% Vehicles, aircraft & vessels 8% Prepared foodstuffs, beverage s & tobacco 9% Base metals 13% Chemical products 13% Mineral products 1 Prepared foodstuffs, beverages, tobacco 8% Mineral products 11% Chemical products 11% Vehicles, aircraft and vessels 1 Base metals 1 Sources: Quantec, SBR

51 Imports dominated by mineral products 50 Import commodities Import commodities Miscellaneous manufactured articles Precious & semiprecious metals & stones Vegetable products Prepared foodstuffs, beverages & tobacco Vehicles, aircraft & vessels 1% Chemical products Plastics & rubber 1% 0% Other 1% Base metals 3% Optical & photographic equipment 3% Other 10% Machinery & mechanical appliances Base metals Textiles 3% Vehicles, aircraft & vessels Plastics & rubber Mineral products 31% Chemical products Textiles 6% Machinery & mechanical appliances 2 Mineral products 8 Special classification of original equipment 11% Sources: Quantec, SBR

52 Private and confidential : malaise to persist

53 : malaise likely to persist 52 Key forecasts Growth data e 2014f 2015f GDP (% y/y) Final consumption expenditure by households FCEH (% y/y) Gross fixed capital formation GFCF (% y/y) Government expenditure (% y/y) Exports (% y/y) Imports (% y/y) Current account balance Inflation CPI (% y/y), annual average Interest rates Prime (year end) Prime (annual average) Exchange rates USD/ZAR (average) EUR/ZAR (average) GBP/ZAR (average) Sources: Bloomberg, SARB, Stats SA, SBR

54 Private and confidential Thank you

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57 Shireen Darmalingam* Macroeconomic Strategist