1 / 46

The new Keynesian world and the MTBPS

The new Keynesian world and the MTBPS. A presentation by Dawie Roodt. Step 1: re-focus?. What went wrong? . The excuses: Insufficient regulation Greed Speculators The truth: Loose monetary policy Political interference. Its all about your approach . Fed Printing money. US Economy.

breanna-daugherty
Download Presentation

The new Keynesian world and the MTBPS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The new Keynesian world and the MTBPS A presentation by Dawie Roodt

  2. Step 1: re-focus? Dawie Roodt

  3. What went wrong? The excuses: • Insufficient regulation • Greed • Speculators The truth: • Loose monetary policy • Political interference Dawie Roodt

  4. Its all about your approach Dawie Roodt

  5. Fed Printing money US Economy Buying Bonds / TB’s US Fed Some economic activity Fund $ Resource prices ↑ Emerging Markets Dawie Roodt

  6. The driving forces • Euro under threat: ↓ Euro • Dollar under threat: ↓ $ • ↑Renminbi • ↑ Commodity Prices • Strong Rand (for now) Dawie Roodt

  7. The “new” economic growth plan Dawie Roodt

  8. The plans: • HOP - 1994 • GEAR - 1996 • Asgisa - 2006 • The new Growth Plan - 2010 “Apartheid” Macro economic stability Harvard group ↓Poverty & ↓Unemployment = ↑ Economic Growth Dawie Roodt

  9. New growth plan targets • Stringent Fiscal policy focused on savings • Smaller Current Account deficit • Lower interest rates • Competitive currency • Lower unemployment Dawie Roodt

  10. Creating jobs according to NGP & MTBPS • Labour market strengthening & skills development • Further help from development finance institutions for infrastructure development • IPAP2 • Improve competitiveness • Improve public service delivery & management Dawie Roodt

  11. Will companies expand sufficiently? Dawie Roodt

  12. Some limitations: Dawie Roodt

  13. What about our currency? Dawie Roodt

  14. The Rand since 1977 9/11 Financial crisis of ‘08 Source: I-net Bridge & Efficient Group forecast Dawie Roodt

  15. The Rand & Relative PPP Source: I-net Bridge & Efficient Group forecast using World bank PPP Dawie Roodt

  16. The Rand & Relative PPP Source: I-net Bridge & Efficient Group forecast using World bank PPP Dawie Roodt

  17. The Rand & Relative PPP Source: I-net Bridge & Efficient Group forecast using World bank PPP Dawie Roodt

  18. The Rand & Relative PPP Source: I-net Bridge & Efficient Group forecast using World bank PPP Dawie Roodt

  19. The Rand & Absolute PPP Source: I-net Bridge & Efficient Group forecast using World bank PPP Dawie Roodt

  20. The Rand & Absolute PPP R7.13 R5.03 Source: I-net Bridge & Efficient Group forecast using World bank PPP Dawie Roodt

  21. The Rand & Absolute PPP Source: I-net Bridge & Efficient Group forecast Dawie Roodt

  22. The Rand & Portfolio inflowssince 1985 Large outflows → Weakening of the Rand Source: SARB Dawie Roodt

  23. So…what can be done? Dawie Roodt

  24. SA’s solution SAEconomy Buying $$$ SARB Rands TB’s & Debentures Dawie Roodt

  25. So…what can be done? Dawie Roodt

  26. Another solution SAEconomy Buying $$$ SARB Rands Excess revenue & cash deposits Treasury SARB owes R135bn!! Dawie Roodt

  27. Step 2: re-evaluate? Dawie Roodt

  28. Is the PIT burden shifting? YES! Source: Tax statistics 2008/09, National Treasury & Efficient Group est. for 2010 Dawie Roodt

  29. Income distribution SA’s Gini = 57.8 Cumulative share of income Cumulative share of population Source: SA Survey, Employment & income 2009 & Efficient Group graph, World HDI report 2009. Dawie Roodt

  30. Income distribution Source: World HDI report 2009. Dawie Roodt

  31. Income distribution reloaded Source: Efficient Reseach Dawie Roodt

  32. Who pays and who receives? Source: SA Survey 2008/09, Employment and Income & Efficient Group est. Dawie Roodt

  33. How do we spend? Social services = 44.2% Source: www.budget.gov & Feb. 2010 National Budget Dawie Roodt

  34. How do we compare? Well done SA! Dawie Roodt

  35. NO! Is our state saving? Source: Feb. 2010 National Budget – Consolidated budget data, Efficient Research calculation Dawie Roodt

  36. How do we spend on capital? FIFA PREP Source: SARB Dawie Roodt

  37. Step 3: re-think? Dawie Roodt

  38. The main numbers… Source: Feb. 2010 Budget & Efficient Research Dawie Roodt

  39. MTBPS summary • Synergy between growth plan & budget • Better economic growth outlook • Better revenue & expenditure than budgeted • Reinforcing infrastructure & investment growth – R811bn over MTEF • Forex control reforms • Regulatory reforms • NHI Dawie Roodt

  40. Will the NHI really work ? Source: World Bank development indicators 2009 Dawie Roodt

  41. Will the NHI really work ? $164 p/c = R52Bn p/y Source: World Bank development indicators 2009 * Efficient Group estimates Dawie Roodt

  42. Is this really necessary? Source: Efficient Research Dawie Roodt

  43. Our problems… • Unemployment • Poverty • Collusion • Greed • “Do more” • Too many cars Dawie Roodt

  44. The solution Better income redistribution Employment Economic growth Poverty alleviation Creating wealth Dawie Roodt

  45. Questions? Dawie Roodt

  46. Contact us on 012 460 6950 www.efgroup.co.za This Report is confidential and for the information of clients only. Information and sources in this document are from sources believed to be reliable, but cannot be guaranteed due to the nature thereof. Information contained in the report should not be construed as financial advice. Professional financial advice should be sought before any course of action is pursued. Efficient Group (Pty) Ltd shall not be responsible and disclaims all liability for any loss, liability, damage (whether directly or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable, directly or indirectly, to the use or of reliance upon any information contained in this report. The company, directors and staff may from time to time have interests in the shares mentioned in this report. Authorised Financial Services Provider • FSP No: 859 Dawie Roodt

More Related