1. Robust injection or damp squid?*
07/16/96
Budget 2002
Robust injection or damp squid?
Economics Division *

2. All fall down GDP, annual percent change Developing countries World*
07/16/96
All fall down
GDP, annual percent change
Excluding China & India, Dev. country GDP is likely to be below 3% in 2002
Developing countries
World
South Africa
USA
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002 *

3. Global downturn bites Gold exports Merchandise imports*
07/16/96
Global downturn bites
Quarter on quarter, seasonally adjusted, at 1995 prices
Gold exports
Merchandise imports
SA mirror’s slump in global trade
Merchandise exports
2000
2001 *

4. Room for fiscal stimulus*
07/16/96
Room for fiscal stimulus
General government fiscal balance, % of GDP
United States
Some are better placed to cushion downturn
Advanced economies*
South Africa
Developing countries
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
* G7 nations *

5. Household consumption expenditure
Q/Q, saar, at 1995 prices
% per annum
HCE - left scale
Prime interest rate (inverted)
Falling interest rates help buoy spending
1997
1998
1999
2000
2001

6. Ratios of household spending and its determinants
1999
Moderate growth in household spending...
Household consumption expenditure to GDP
Employees compensation to GDP
Household debt to disposable income
2001
2000
… as income growth eases
… partly financed by debt ...

7. Risk of wage spiral Nominal remuneration per worker 9.1 8.4*
07/16/96
Risk of wage spiral
Annual percentage change
Upward wage pressures ...
Nominal remuneration per worker
9.1
8.4
Productivity
7.0
… and easing productivity …
6.0
4.8
4.0
Nominal unit labour costs
… equals accelerating unit labour costs
3.4
2.9
2.9
1999
2000
2001*
*data point refers to first half of 2001 *

8. Tightening monetary bias*
07/16/96
Tightening monetary bias
Percentage change year on year
Prime lending rate
Inflation and interest rate risk weighted towards the upside
Out of target
CPIX
inflation target
1998
1999
2000
2001
2002 *

9. Net capital formation Nominal rand millions, 1991-2000*
07/16/96
Net capital formation
Nominal rand millions,
Combined 11% increase forecast over the MTEF period, but it’s off a low base *

10. Government capital investment to current expenditure ratio*
07/16/96
Government capital investment to current expenditure ratio
Percentage, as at 31 March, consolidated general government
Will rise over the MTEF period 85 87 89 91 93 95 97 99 01 *

11. Real gross fixed capital formation*
07/16/96
Real gross fixed capital formation
Q/Q, seasonally adjusted at annual rate
Investment across most sectors
Private sector
1996
1997
1998
1999
2000
2001 *

12. Real interest rates Still high historically 90 91 92 93 94 95 96 97 98*
07/16/96
Real interest rates
Percentage per annum
Deflated by CPI
Still high historically
Deflated by CPIX 90 91 92 93 94 95 96 97 98 99 00 01 *

13. Profit squeeze Producer prices Limited pass-through to consumers*
07/16/96
Profit squeeze
Percentage change year on year
Producer prices
Limited pass-through to consumers
Consumer prices
1999
2000
2001 *

14. Profit slump Reduced scope for investment 90 91 92 93 94 95 96 97 98*
07/16/96
Profit slump
Percentage change year on year
Gross operating surpluses
Reduced scope for investment 90 91 92 93 94 95 96 97 98 99 00 01 *

15. Investment and saving Gross savings to GDP*
07/16/96
Investment and saving
Gross savings to GDP
Gross fixed capital formation to GDP 90 91 92 93 94 95 96 97 98 99 00 *

16. The end gballim@sbic.co.za www.ed.standardbank.co.za*
07/16/96
The end
Economics Division *