clive coetzee general manager: infrastructure management and economic services kzn provincial...

IMPLICATION OF GLOBAL ECONOMIC DEVELOPMENTS ON NATIONAL AND

PROVINCIAL ECONOMIES

Clive CoetzeeGeneral Manager: Infrastructure Management and Economic ServicesKZN Provincial Treasury

INTERNATIONAL MACRO ECONOMIC TRENDS

INTERNATIONAL MACRO ECONOMIC TRENDS

Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12

-15

-10

-5

0

5

10

15 GDP GROWTH RATE

Australia Hungary

Japan Turkey

India

% CHANGE YOY

INTERNATIONAL MACRO ECONOMIC TRENDS

Jun-0

9Ju

l-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-1

0

Feb-10

Mar-10

Apr-10

May-10

Jun-1

0Ju

l-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-1

2

Feb-12

Mar-12

Apr-12

May-12

Jun-1

2Ju

l-12

Aug-12

95

96

97

98

99

100

101

102

103 LEADING INDICATOR

Australia Hungary

Sweden United States

Index

INTERNATIONAL MACRO ECONOMIC TRENDS

Jun-0

9Ju

l-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-1

0

Feb-10

Mar-10

Apr-10

May-10

Jun-1

0Ju

l-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-1

2

Feb-12

Mar-12

Apr-12

May-12

Jun-1

2Ju

l-12

Aug-12

Sep-12

4

5

6

7

8

9

10

11

12UNEMPLOYMENT

Hungary Japan

Russia Federation European Area

%

INTERNATIONAL MACRO ECONOMIC TRENDS

Jun-0

9Ju

l-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-1

0

Feb-10

Mar-10

Apr-10

May-10

Jun-1

0Ju

l-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-1

2

Feb-12

Mar-12

Apr-12

May-12

Jun-1

2Ju

l-12

Aug-12

Sep-12

-2

-1

0

1

2

3

4

5

6

7

8INFLATION

Chile France Poland

China South Africa

%

INTERNATIONAL MACRO ECONOMIC TRENDS

Jul-0

9

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-1

0

Feb-10

Mar-10

Apr-10

May-10

Jun-1

0Ju

l-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-1

2

Feb-12

Mar-12

Apr-12

May-12

Jun-1

2Ju

l-12

Aug-12

-40

-30

-20

-10

0

10

20

30IMPORTS% CHANGE YOY

INTERNATIONAL MACRO INDICATORS

INTERNATIONAL MACRO INDICATORSJa

n-09

Feb-

09M

ar-0

9A

pr-0

9M

ay-0

9Ju

n-09

Jul-0

9A

ug-0

9S

ep-0

9O

ct-0

9N

ov-0

9D

ec-0

9Ja

n-10

Feb-

10M

ar-1

0A

pr-1

0M

ay-1

0Ju

n-10

Jul-1

0A

ug-1

0S

ep-1

0O

ct-1

0N

ov-1

0D

ec-1

0Ja

n-11

Feb-

11M

ar-1

1A

pr-1

1M

ay-1

1Ju

n-11

Jul-1

1A

ug-1

1S

ep-1

1O

ct-1

1N

ov-1

1D

ec-1

1Ja

n-12

Feb-

12M

ar-1

2A

pr-1

2M

ay-1

2Ju

n-12

Jul-1

2A

ug-1

2S

ep-1

20

2

4

6

8

10

12

14SHORT TERM INTEREST RATES

Australia Mexico

Poland United States

Russian Federation

%

Aug-07

Oct-07

Dec-07

Feb-08

Apr-08

Jun-0

8

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-0

9

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-1

0

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Jun-1

1

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Jun-1

2

Aug-12

70.00

80.00

90.00

100.00

110.00

120.00

130.00

140.00

150.00

160.00AUSBRLNZDKORCADZAR

INTERNATIONAL MACRO INDICATORS

World Currency = Index USD

INTERNATIONAL MACRO INDICATORS

0

500000

1000000

1500000

2000000

2500000

0

20000

40000

60000

80000

100000

120000

140000

160000Government debt - Millions of euro

Italy France United Kingdom

Hungary Sweden

INTERNATIONAL MACRO INDICATORS

Jul-0

9

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-1

0

Feb-10

Mar-10

Apr-10

May-10

Jun-1

0Ju

l-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-1

2

Feb-12

0.00

50.00

100.00

150.00

200.00

250.00

300.00 STOCK MARKET PERFORMANCE

Australia Hungary Japan

Poland

Index, 2005=100

INTERNATIONAL ECONOMIC TRENDS

INTERNATIONAL ECONOMIC TRENDS

Political Polarization

Economic Ideological Differences

Geo Spatial Differences

Policy Uncertainty

INTERNATIONAL ECONOMIC TRENDS

Global Volatility

Sovereign Debt Markets

Energy Market

Global Warming

INTERNATIONAL ECONOMIC TRENDS

Rising Economic Powers

China Slowing Down

Brazil Still Powering

South Africa Internal Struggles

INTERNATIONAL ECONOMIC TRENDS

INTERNATIONAL ECONOMIC TRENDS

Fundamental Economic Change

Technological Advancement

Decrease Communication and Transport Costs

Increase in World Supply of Labour

Reduction of Trade Barriers

INTERNATIONAL FUNDAMENTAL CHANGES

The primary-products economy has come "uncoupled" from the industrial economy.

In the industrial economy itself, production has come "uncoupled" from employment.

Capital movements rather than trade (in both goods and services) have become the driving force of the world economy. The two have not quite come uncoupled, but the link has become loose, and worse, unpredictable.

SUMMARY

Africa as a new frontierCommodity prices cyclesSharp depreciation of local currencyDisruptions to productive activityMonetary policy spaceDeteriorating World rankings City economic concentration levelsUrbanization Rates

SUMMARY

In SA we have the situation of TWIN Headwinds:

Global Economic SlowdownDomestic Uncertainty and Unrest

Outlook does not look good – but.....

SUMMARY

“Good” Economic PoliciesAn “attractive” DestinationImplementation and Service

Orientated EthicFocus on Cities Social Partnership for development