South Africa Economy
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Economics prospects for 2014 for SA - YouTube

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This video re-affirms South Africa's outlook for 2014. Moody explains the increasing interest rate, and how the increased interest rate is likely to follow. It also compares South Africa's outlook to those of other African countries. South Africa is likely to no longer to be the strongest economy in hte continent, and Nigeria is likely to take their spot. He also says that he xpects many of the eastern African countries to become contenders in the next couple of years. Finally, he talks about the strength of the rand in comparison to the dollar and how it is depreciating and therefore, when they trade, they are causing the inflation to further increase because they can't buy as much with their money, so theyhave to set prices high to pay for the cost of the imports.

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Nathan and Joseph's curator insight, April 9, 2015 11:18 PM

Africa Economic: In Africa the debt is rising at 47%. Despite this fact they say the next ten years looks surprisingly good.  The nations that are important include Nigeria which is re basing their gdp and is becoming the biggest economy in Africa.  Ethiopia and Ghana are both said to be standing out in potential for having a solid economy.  Though Africa has had some tough years there looks to be some promise at hand for African countries.

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South Africa Interest Rate | Actual Data | Forecasts | Calendar

South Africa Interest Rate | Actual Data | Forecasts | Calendar | South Africa Economy | Scoop.it
The benchmark interest rate in South Africa was last recorded at 5.50 percent. Interest Rate in South Africa is reported by the South African Reserve Bank. Interest Rate in South Africa averaged 13.23 Percent from 1998 until 2014, reaching an all time high of 23.99 Percent in June of 1998 and a record low of 5 Percent in July of 2012. In South Africa, the interest rates decisions are taken by the South African Reserve Bank’s Monetary Policy Committee (MPC). The official interest rate is the repo rate. This is the rate at which central banks lend or discount eligible paper for deposit money banks, typically shown on an end-of-period basis. This page provides - South Africa Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.
Lizzie Krinkie's insight:

The South African Reserve Bank decided to keep the interest rate at 5.50 percent. This is near the country's all time low rate of 5%. However, there is talk of possibly increasing the interest rates in the future in order to decrease inflation. Increasing the interest rate will also increase the inflow of investments from foreign investors. Monetary policy does have a lag though and too slow a pace of contractionary policy could undermine inflationary expectations. As of now though the county has decided to let the markets play out as is without interfering with the interest rates.

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South Africa Inflation Rate | Actual Data | Forecasts | Calendar

South Africa Inflation Rate | Actual Data | Forecasts | Calendar | South Africa Economy | Scoop.it
The inflation rate in South Africa was recorded at 6 percent in March of 2014. Inflation Rate in South Africa is reported by the Statistics South Africa. Inflation Rate in South Africa averaged 9.46 Percent from 1968 until 2014, reaching an all time high of 20.90 Percent in January of 1986 and a record low of 0.20 Percent in January of 2004. In South Africa, the most important categories in the consumer price index are Housing and Utilities (24.5 percent of total weight), Transport (16.4 percent of total weight) and Food and Non-Alcoholic Beverages (15.4 percent of total weight). Others include: Miscellaneous Goods and Services such as personal care, insurance and finance (14.7 percent); Alcoholic Beverages and Tobacco (5.4 percent); Household Contents, Equipment and Maintenance (4.8 percent); Recreation and culture (4.1 percent); Clothing and Footwear (4.1 percent). The smallest components are Restaurants and Hotels at 3.5 percent; Education at 3 percent; Communication at 2.6 percent; and Health at 1.5 percent. The CPI basket was revised in January of 2013. This page provides - South Africa Inflation Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.
Lizzie Krinkie's insight:

While inflation rates in South Africa are on the rise, they are not as high as they have been in the past. The graph in this article shows a clear business cycle with inflation increasing and decreasing periodically. South Africa should aim for an inflation rate of about 1-3% as a baseline. In order to decrease inflation the central bank of South Africa should inact tight money policy and decrease the money supply. However, they need to be careful they don't decrease production too much in the process.

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Nkandla in the wind

Nkandla in the wind | South Africa Economy | Scoop.it
Zuma says he’s spotless “I AM often asked by people from India and Russia, ‘Why do you worry?’”, says David Lewis, head of Corruption Watch, a privately...
Lizzie Krinkie's insight:

While this article has a focus on corruption of Soth African President, Jacob Zuma, who spent 246m rand in public dollars on his private home, a portion explains why the South African central bank recently raised interest rates. Despite a weak economy, the country raised interest rates to controll increasing inflation. As we have dicussed in class, raising interest rates is part of a tight money policy. Increasing interest rates leads to a decrease in business investment which decreases the country's aggregate demand shifting the aggreagate demand curve to the left. This decrease in demand then creates a decrease in price level, which is why the central bank is using this policy to combat inflation. However, this could hinder the country's economy because a decrease in aggregate demand also leads to a decrease in real output.

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South Africa faces capital flight as investors pull back become risk averse, the central bank says

South Africa faces capital flight as investors pull back become risk averse, the central bank says | South Africa Economy | Scoop.it
South Africa's central bank warned that yawning deficits and labor turmoil have made the economy vulnerable to capital flight as investors pull back from risky markets.
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The current account deficit and lessening exports due to labor turmoil has caused investors to pull out.  With less investment, South Africa has had to turn to "safer alternatives" to service their deficit such as treasurys and stocks and bonds. With less investment, the AD will continue to decrease and further drive down the exports.  

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Higher inflation heightens prospect of another interest rate hike this year

Higher inflation heightens prospect of another interest rate hike this year | South Africa Economy | Scoop.it
Tighter monetary policy set to damp growth by slowing household spending
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In this iarticle it expalins how the inflation rate is on the rise once again this year, and how it will most likely cause an interest rate hike in the near future. The increasing prices of food and petrol continue to push the inflation further upward, is in fact a delayed effect of the drought form last year, and hopefully won't be a faactor in the next year. With the tight money policy of the higher inflation rate, and possible interest rate increase,  people don't have the ability to buy as much, or in other wirds, the AG curve will decrease and shift to the left, causing the output to decrease.

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Trade Barriers in South Africa

Trade Barriers  in South Africa | South Africa Economy | Scoop.it
U.S. companies have cited protective tariffs as a barrier to trade in South Africa. Other barriers to trade often cited include port congestion, technical standards, customs valuation above invoice prices, theft of goods, import permits, antidumping measures, IPR crime, an inefficient bureaucracy, a
Lizzie Krinkie's insight:

South Africa has a very complicated import process with approximately 90,000 tariff codes. Having a difficult process for impoting goods creates a better balance of trades. Tariffs on incoming goods decreases the number of imports. This reflects well on the country's real GDP since real GDP counts a country's net exports. However, to African consumers tariffs can increase the cost of foreign produced products. There are opportunity costs to tariffs that the South African government needs to understand in the long run. If the tariffs become too high then foreign countries will no longer want to export goods to South Africa.  

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A huge investment in education

A huge investment in education | South Africa Economy | Scoop.it
Information on social
development in South Africa: the social security net, land reform,
and provision of basic education, housing, electricity, water and
sanitation
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This article focuses on South Africa's increased government spending on education. South Africa's investment on education is among the highest in the world at about 5% of the national GDP. In the short run the increase in government spending is an increase in aggregate demand. However, increased government spending can also lead to crowding out. If the government spends a lot of money on public schools the market of private schools is likely to decrease, which counters the increase in aggregate demand with a decrease in aggregate demand due to less private investment. In the long run though the country is hoping its investment in education will pay off by making the country's workforce smarter and more productive. A more productive workforce means aggregate supply will shift to the right causing real ouput to increase and price level to decrease.

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Pound to South African Rand (GBP/ZAR) Exchange Rate Moves away from 4-Week High | Future Currency Forecast

Pound to South African Rand (GBP/ZAR) Exchange Rate Moves away from 4-Week High | Future Currency Forecast | South Africa Economy | Scoop.it
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The SA Rand has reached a one-month low from the political unrest in Ukraine. However, it has begun to recover some ground from the recent Easter weekend. Due to the depreciation, South Africa's exports should go up, which will help to improve their economy because of the increased capital inflow used to service their current account deficit.

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Reserve Bank warns that tapering poses risk to SA financial stability

Reserve Bank warns that tapering poses risk to SA financial stability | South Africa Economy | Scoop.it
Reserve Bank report cautions that reduction to US quantitative easing programme, higher interest rates in advanced economies may harm South African economy
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South Africa's reserve bank explains that tapering could harm their economy because they have a relatively large current account deficit, and rely on the capital inflows to help wth the deficit. Although this could possibly harm the economy, they will remain okay due to a flexible exchange rate, robust financial infrastructure, and open deeply liquid markets.  The tapering will also potentilly cause higher interest rates, which will cause investment to decrease, causing aggregate demand to decrease as well, which will decrease output and real GDP.

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