1 / 32

Prospects for the World & SA economies

Prospects for the World & SA economies. 2003 Medium Term Budget Policy Statement Macro-economic Policy. Ben Smit (BER) 17 November 2003. Outline. Macro-economic forecasts Recent SA economic developments Treasury forecast Previous Treasury forecasts Macro-economic policy aspects General

bryson
Download Presentation

Prospects for the World & SA economies

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. Prospects for the World & SA economies 2003 Medium Term Budget Policy Statement Macro-economic Policy Ben Smit (BER) 17 November 2003

  2. Outline • Macro-economic forecasts • Recent SA economic developments • Treasury forecast • Previous Treasury forecasts • Macro-economic policy aspects • General • Fiscal variables • Inflation targeting • Structural/developments issues

  3. Prospects for the World & SA economies Macro-economic Forecasts

  4. Recent SA economic developments – Remarkable macro stability • Remarkable macro stability

  5. SA economy: GDP growth

  6. SA economy: BoP as % of GDP

  7. SA economy: Inflation (CPIX) 6% upper target

  8. Longest business cycle upswing since WW II

  9. Recent SA economic developments – Remarkable macro stability • Remarkable macro stability • Strong and volatile exchange rate

  10. Emerging & other currencies vs USA $

  11. SA economy: R/$ vs PPP

  12. Real trade-weighted rand back to levels of early 1998

  13. Recent SA economic developments – Remarkable macro stability • Remarkable macro stability • Strong and volatile exchange rate • Limited slowdown in 2003

  14. RMB/BER Business Confidence Index

  15. Investec Purchasing Managers Index Oct 2003

  16. Treasury forecast

  17. Previous Treasury forecast

  18. Prospects for the World & SA economies Macro-economic Policy Aspects

  19. Macro-economic policy:General comments • Two classes of economic policy • Stabilization policies: policies designed to moderate short-term fluctuations in the economy • Structural policies: policies aimed improving the longer-term performance of the economy • Macro-economic policy • Monetary and fiscal policy • Fiscal policy: • policy with regard to structure and level of government spending, taxation and financing of deficits • Stabilization - changes in above • Government expenditure, taxation and financing aspects covered in MTBPS both stabilization (macro) and structural issues

  20. Fiscal variables: consumer expenditure (%)

  21. Fiscal variable: fixed investment (%)

  22. Taxes: total tax burden

  23. Taxes: Direct as % of total

  24. Taxes: Personal Tax Rate

  25. Government savings (%)

  26. Deficit before borrowing

  27. Fiscal variables: government debt (%)

  28. 2003 MTBPS projections

  29. 2003 MTBPS projections (continued)

  30. Inflation targeting • Target as continuous 3 – 6% target from annual average • Target 3 – 6% for 2006 and beyond • Escape clause as “explanation clause” • Transparency

  31. Structural/Developmental issues • “…strategy for reinforcing investment and broadening participation in the SA economy” • Exchange public infrastructure capacity • Expanded public works programme • SMME’s • Expanding education and training • Deepening social security programmes • Privitazation (R13bn  R5bn over 3 years) • Tax amnesty • Salary and wages: 6% (2004), 5% (2005), 5% (2006) • HIV/AIDS

  32. BUREAU FOR ECONOMIC RESEARCH Economic Information that works for You www.ber.sun.ac.za E-mail: hhman@ber.sun.ac.za

More Related