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South Africa: Growth and Commodities

South Africa: Growth and Commodities. Presented by: Dawie Roodt 19 September 2007. 2007: Economic Overview. GDP at Market Prices. Source: StatsSA and own calculations. GDP. Source: StatsSA and own calculations. Relative size to GDP. Source: StatsSA and own calculations.

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South Africa: Growth and Commodities

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  1. South Africa: Growth and Commodities Presented by: Dawie Roodt 19 September 2007

  2. 2007:Economic Overview

  3. GDP at Market Prices Source: StatsSA and own calculations

  4. GDP Source: StatsSA and own calculations

  5. Relative size to GDP Source: StatsSA and own calculations

  6. Monetary Policy

  7. Inflation 14.6% Inflation bracket 10.0% 5.2% Source: StatsSA and own calculations

  8. Interest rates

  9. Interest rates

  10. Debt Levels

  11. Credit Extension Source: SARB and own calculations

  12. Household debt to disposable income 59.4% 56.9% 50.2% 44.5% Source: SARB and own calculations

  13. Savings to disposable income of households 9.2% 5.4% 2.6% 0.5% Source: SARB and own calculations

  14. Balance of Payments

  15. Balance of Payments Source: SARS and own calculations

  16. Business and Employment

  17. Average Wage Settlements and the Inflation Rate, 1985-2004 Source: South Africa Survey 2004/2005; Andrew Levy Employment Publications

  18. Mandays Lost as Result of Strikes and Lockouts, 1980-2004 Two large strikes in mining and transport sectors Source: South Africa Survey 2004/2005; Andrew Levy Employment Publications

  19. Strikes by Sector,% of Total Manday Lost (2004) Source: South Africa Survey 2004/2005; Andrew Levy Employment Publications

  20. Capital Expenditure First Picture of Cape Town’s New Stadium:

  21. Capital Expenditure

  22. Economic Impact of the 2010 FIFA World Cup • Direct expenditure of R30.4bn • R15.6bn to be spent by expected 350,000 tourists • Contribute R51.0 billion to the GDP of South Africa (2006-2010) • Generate the equivalent of 159 000 annual jobs • Additional R7,2 billion will be paid to Government in taxes. Source: Gauteng Tourism Authority and Grant Thornton (Financial mail)

  23. Problems: Debt Levels Tax levels Unemployment Crime AIDS Skills State inefficiency Summary Positives: • Strong GDP growth • State debt at more sustainable level • More stable interest rate • Capital expenditure plans

  24. Our Global Spot:Economy and People

  25. Largest Populations, LatestMillions, (% of World Population) Source The economist Pocket word in figures 2007/Nationmaster.com

  26. Population growth estimates 47.0% Source The economist Pocket world in figures 2007

  27. Biggest Economies GDP by purchasing power (PPP), $bn, 2006 Source International Monetary Fund

  28. GDP per Capita, 1970-2006 Source: UN

  29. Productivity LevelsOutput per worker, constant US$2000 (PPP) Source: ILO Global Employment Trends Model *2006 preliminary ILO estimates

  30. Productivity LevelsOutput per worker, constant US$2000 (PPP) Source: ILO Global Employment Trends Model *2006 preliminary ILO estimates

  31. South Africa’sEquity Market

  32. JSE’s Market Capitalisation Resource driven market Source I-Net

  33. Our Global Spot:Commodities

  34. Gold

  35. Gold Price, Yearly Average London Record: $850 p.o: -Soviet Invasion of Afghanistan - Revolution in Iran Source: Comex, London Bullion Market Association

  36. Top Gold Producers, 2004 Source The economist Pocket world in figures 2007

  37. Gold: Brief History • 5000 B.C: Sumerians of Mesopotamia (modern-day Iran/Iraq). Sacred, ornamental and decorative instruments. • Egyptians began art of gold refining • 2700-2270 B.C: Kings of fourth and sixth dynasties issue gold coins • 560-546 B.C: King Croesus ruler of ancient Lydia (Turkey) coins stamped with royal emblem (lion/bull).

  38. Gold Traditions • Weighed in Troy Ounces (31.1 gram) • Gravity of 19.3 (times as heavy as water) so weights 19.3 kg per L or 19.32g/cm³. • 1 troy ounce = 1.6 cm³ • 1 ton of gold = 51,760.0 cm³. • All gold ever mined form cube of 19m sides. (fit under Eiffel Tower!) 1 ton 37.27cm 37.27cm 37.27cm Source The World Gold Council

  39. Gold Traditions • Measured on the carat (or karat) scale. • From carob seed: originally used to balance scales in Oriental bazaars. • Pure gold designed 24 carat. • Measures ‘fineness’ Source The World Gold Council

  40. Our Global Spot:Other Commodities

  41. Top Rough Diamond Producers(2005) Source Financial Mail, IDEX Online, 2006 *SA, Namibia, Botswana

  42. Platinum and PalladiumTop producers, 2004 Source The economist Pocket word in figures 2007

  43. Our Global Spot:Energy

  44. Oil: Brief History • 1860s: Used for disinfectant, vermin killer, hair oil, boot grease, cure for kidney stones… • Before WWII issue was too much supply! • 1933 US paid $275,000 to Saudi Arabia King for oil concession • 1938 Mexico expropriate assets of US and UK • 1960 Opec formed. Unilaterally raised prices first in 1963

  45. Oil: Brief History • 1971: British withdraw from Middle East • 1973: Arab Israeli War (Yom Kippur War) • 1979: Iranian Revolution • 1980s: Oil discovered in Alaska • Opec forced to institute production quotas • 1986: Oil price set in futures markets in New York. • Oil price drivers: • Politics (short run) • Economics, supply and demand (long run) Oil shocks!

  46. Oil Price (Brent Crude) Conflict in Middle East Nigeria Asian Growth Iran/Iraq War Iranian Revolution Series of Opec cuts Gulf War Yom Kippur War 9/11 Source I-Net

  47. Proved Reserves of Major Oil-Producing Countries, 2004 Includes crude oil, shale oil, oil sands and natural gas liquids 60% ! Source The economist Pocket world in figures 2007 1 Opec members.

  48. World Coal Production and ConsumptionMillion tonnes oil equivalent, 2004 Source The economist Pocket world in figures 2007

  49. Uranium Production, 2005 Source Uraniumletter International, October 06

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