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Global Prospects and Their Likely Impact on South Africa

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GLOBAL PROSPECTS AND THEIR LIKELY IMPACT ON SOUTH AFRICA

INDEX:
Table of Contents
Global prospects and their likely impact on South Africa 1
INDEX: 1
Strength of the Recovery 2
Developed Countries: 2
Emerging Markets: 2
Risks to the Global Economy 3
Exit Strategy from Policy Stimulus 4
Repair and reform of the financial sector 4
Fiscal Crises and underinvestment in Infrastructure 4
Socio and Political Implications of Unemployment and Private Demand 5
Asset Price Collapse and the risk appetite of investors 5
Return to Previous Growth Path or Not 5
Will the current crises be “DÉJÀ VU ‘” for the world wide economy? 6
Fundamental Changes in Origins & Nature of Economic Activity 6
Global warming / Climate Change: 7
Population Growth: 7
Power shift to the east: 7
Innovation: 7
Economic Activity: 7
Impact of Global Crisis on South Africa’s Growth Outlook 8
Conclusion 8
BIBLIOGRAPHY: 10

STRENGTH OF THE RECOVERY
All of the world’s high-income countries returned to positive real GDP growth during the fourth quarter of 2009 and the Economist Intelligence Unit’s forecasts for 2010 indicate a return to marginally below the growth trajectory that was achieved prior to the recession.
Developed Countries:
UNITED STATES
Economic recovery in the US has been remarkably strong, with fourth quarter real GDP growth of almost 6% suggesting the presence of a “V”-shaped trend. Further, news emanating from recently published official data includes a recovery of private sector investment in capital formation, particularly on information technology software and machinery & equipment.
A recovery of growth in labour markets has also been reported, with the Federal Reserve latest economic overview describing the labour market as having stabilised. The consensus view amongst leading economists in the US is that formal sector job creation will increase to 300,000 in…...

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