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This page will provide details on how the South African economy compares to its peers all over the world. The page will be updated on an ad hoc basis as new information becomes available.
Comparisons will include economic growth rates and economic size, to inflation rates and unemployment rates. |
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29 May 2019: South Africa's GDP per capita will be less than emerging markets soon
In our first update on one of our website's most popular pages in over a year, we take a look at the latest numbers published by the International Monetary Fund which shows that South Africa's GDP per capita (calculated using purchasing power parity and in current prices) will be less than t the group of world economies classified as emerging and developing markets within the next three years. The main reason for this being the strong growth in China and India, while South Africa's economic growth has been stagnating at levels below 1%, while India grows easily above 7% and China is growing at around 6% and has been for decades now. This graphic below is a clear visual illustration of how South Africa is being left behind by the rest of the world
If the South African government and policy makers cant get growth in one of Africa's biggest economies kick started soon, the rest of the world will outpace South Africa in terms of poverty reduction, overall wealth and prosperity of people and continued economic growth and development while South Africa keeps spinning its wheels due to corruption, ineffective and inefficient policies and its implementation, lack of investment opportunities, policy uncertainty in terms of property rights to name but a few stumbling blocks in South Africa's economy right now.
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15 May 2018: South Africa's growth predictions compared to World growth
In this update we take a look at the growth predictions for the world as well as selected countries such as United States, Germany, China, India and of course South Africa.
It is clear from the graphic above that the Asian countries (China and India) have growth rates and predicted growth rates far greater than the world average and more industrialised countries such as the United States and Germany. While China and their economic growth rate has been driving world growth for years now, the next phase of world economic growth will largely be driven by the Asian Tiger (India). India's economic development is at a very early stage, with urbanization speeding up rapidly now (as it has been in China for years). This will lead to strong demand for materials and eventually goods and services. We tip India to shoot up the ranks in terms of economic size and their importance on the world stage.
Sadly South Africa's growth is about as flat as a pancake. With growth and predicted growth that is not nearly sufficient to drag millions of South Africans out of both poverty and unemployment.
Predicted growth rates for the above mentioned countries for 2018 are as follows:
Sadly South Africa's growth is about as flat as a pancake. With growth and predicted growth that is not nearly sufficient to drag millions of South Africans out of both poverty and unemployment.
Predicted growth rates for the above mentioned countries for 2018 are as follows:
- World 3.9%
- United States 2.7%
- Germany 2.3%
- China 6.6%
- India 7.4%
- South Africa 0.9%
26 March 2017: External Debt as % of GNI for BRICS countries
In today's update we take a look at the external debt of the BRICS countries as a percentage of Gross National Income (GNI). Note the data for the graphic below as obtained from the World Bank. Below the definitions used by the World Bank for calculating External Debt as percentage of GNI.
Total external debt stocks to gross national income.
Total external debt is debt owed to nonresidents repayable in currency, goods, or services. Total external debt is the sum of public, publicly guaranteed, and private nonguaranteed long-term debt, use of IMF credit, and short-term debt. Short-term debt includes all debt having an original maturity of one year or less and interest in arrears on long-term debt. GNI (formerly GNP) is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad.
Total external debt stocks to gross national income.
Total external debt is debt owed to nonresidents repayable in currency, goods, or services. Total external debt is the sum of public, publicly guaranteed, and private nonguaranteed long-term debt, use of IMF credit, and short-term debt. Short-term debt includes all debt having an original maturity of one year or less and interest in arrears on long-term debt. GNI (formerly GNP) is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad.
Concerning for South African readers is the fact that South Africa's debt it owes the rest of the world is ever increasing as a percentage of the total Gross National Income of the country. It does seem that South Africa finds itself in a debt trap and it is a very hard position to get out of. When the going gets really tough, more debt is made just to pay off other debt, and this endless cycle of repaying debt instead of using the money on the citizens of the country hampers economic progress and development. Debt is like a ships anger being deployed while the ship actually wants to sail. It holds the ship back, and int he same way to much debt for a specific country holds it back from moving forward and developing.
South Africa's external debt as percentage of GNI is the highest of all the BRICS countries, and this is very worrying considering the economic woes Brazil and Russia in particular have been experiencing in recent years. With low commodity prices (in particular gas and oil related products affecting Russua), as well as various sanctions imposed against Russia, and yet their debt as percentage of GNI is less than that of South Africa. Just showing the deep trouble the South African government finances are in.
South Africa's external debt as percentage of GNI is the highest of all the BRICS countries, and this is very worrying considering the economic woes Brazil and Russia in particular have been experiencing in recent years. With low commodity prices (in particular gas and oil related products affecting Russua), as well as various sanctions imposed against Russia, and yet their debt as percentage of GNI is less than that of South Africa. Just showing the deep trouble the South African government finances are in.
6 November 2017: Unemployment rates of various countries vs South Africa
The horizontal bar chart below shows the unemployment rate of all the EU countries, the USA, Japan and South Africa for 2008, 2012 and 2016. We selected only these three years for the purpose of this graphic so as not to clutter the graphic up with to much detail. The graph is sorted from low to high unemployment rates (based on the 2016 unemployment rate). Based on the sorted graphic, Iceland has the lowest unemployment rate , followed by Japan and the Czech Republic. On the other end of the scale, Spain has the 3rd highest unemployment rate of all countries in this graphic, followed by Greece with the 2nd highest unemployment rate all countries in the comparison while South Africa has the highest unemployment rate of all the countries in this comparison.
While Spain, Greece and South Africa had very similar unemployment rates in 2012, Spain and Greece has made strides in reducing the rate of unemployment since then (granted Greece's unemployment rate has only declined marginally since 2012, it has at least declined). South Africa's unemployment rate has increased from 2012, when it was sitting at 24.9%, to the current 2016 numbers of 26.7% (and as we know the latest unemployment numbers show South Africa's current unemployment rate is at 27.7%). While most countries have brought down their unemployment levels since 2012 (after the great recession caused by US sub-prime mortgage crisis), South Africa has not been able to stop the steady increase in its unemployment rate. Slow to no economic growth coupled with population growth outpacing economic growth, and more and more people entering the jobs market has all lead to South Africa being unable to stem the increasing unemployment rate. This is currently the single biggest economic problem for South Africa. Failure to address this will lead to all kinds of social upheaval as the populous will demand change.
16 October 2017: Inflation rates of various countries across the world vs SA
The line chart below shows the actual inflation experienced by various countries up to 2016, and then an IMF forecast of expected inflation of the countries in question up to the year 2022. Expected inflation is based on estimates of IMF staff members.
From the line chart above it is pretty clear that South Africa's inflation rate is essentially mid way between those with the highest rates of inflation and those countries such as Germany and USA with very low levels of inflation. Generally well developed and complex economies with a lot of competition in their markets tend to have lower overall rates of inflation. While more developing countries or countries in which there is not a lot of openness or competition present tend to have higher overall levels of inflation.
Based on IMF estimates for 2017-2022 inflation is forecasted to average the following for these countries:
Brazil: 4.5%
Chile: 3%
China: 2.7%
Egypt: 12%
Germany: 2.1%
India: 5%
Nigeria: 14.5%
South Africa: 5.6%
United States of America: 2,4%
Based on IMF estimates for 2017-2022 inflation is forecasted to average the following for these countries:
Brazil: 4.5%
Chile: 3%
China: 2.7%
Egypt: 12%
Germany: 2.1%
India: 5%
Nigeria: 14.5%
South Africa: 5.6%
United States of America: 2,4%
GDP growth rates
The graphic below shows some of the worlds largest developed and developing economies' growth rates post the 2009 recession caused by the US sub prime mortgage loan crisis. As can be seen from the graph South Africa has not exactly been hitting the lights out since the 2009 recession, with growth actually declining from 2011 to 2014 (the light blue being 2011 and the red being 2014 growth rates), while India, the UK and USA seem to be on the right track, as their 2014 GDP growth rates (red bars) are higher than the blue bars which is the 2011 growth rates. The BRICS countries that were driving world economic growth over the 10 odd years now seem to be losing steam while the more sophisticated and better diversified developed economies are flourishing.
South Africa's economy. Just how big is it compared to the rest of the world?
The graphic below shows the world's 50 biggest economies (as at end of December 2015), based on data from the World Bank. The width of the bar represents the relative size of each economy. Hover over a bar to get details on the country's ranking as well as the size of the economy in question (expressed in $ millions). South Africa is currently ranked as the 33rd largest economy in the world.
Interesting to note South Africa is the only BRICS country that is not in the Top 10 biggest economies in the world. In fact the smallest BRICS country after South Africa is Russia, and their economy is 5.3 times greater than that of South Africa's. It begs the question. What is South Africa doing as part of the BRICS group? We clearly cannot punch at the weight our peers in BRICS are punching at.
Interesting to note South Africa is the only BRICS country that is not in the Top 10 biggest economies in the world. In fact the smallest BRICS country after South Africa is Russia, and their economy is 5.3 times greater than that of South Africa's. It begs the question. What is South Africa doing as part of the BRICS group? We clearly cannot punch at the weight our peers in BRICS are punching at.
The biggest economy in the world is the United States of America, and their economy is 49.8 times the size of the South African economy. China, the world's 2nd biggest economy is around 29 times the size of the South African economy. This does put into perspective just how small South Africa's economy is in the bigger scheme of things.
South Africa is the 2nd largest economy in Africa though, with just Nigeria being bigger. Nigeria is ranked as the 22nd largest economy in the world and it's economy is about 60% larger than that of South Africa. Nigeria has a larger population than South Africa though (roughly 4 times as many people living in Nigeria than in South Africa), so the GDP per capita (size of a country's economy expressed per person living in it) of South Africa is higher than that of Nigeria. Essentially the average South African is wealthier/better off than the average Nigerian. South Africa's GDP per capita works out to roughly $6400 while Nigeria's works out to about $3200.
South Africa is the 2nd largest economy in Africa though, with just Nigeria being bigger. Nigeria is ranked as the 22nd largest economy in the world and it's economy is about 60% larger than that of South Africa. Nigeria has a larger population than South Africa though (roughly 4 times as many people living in Nigeria than in South Africa), so the GDP per capita (size of a country's economy expressed per person living in it) of South Africa is higher than that of Nigeria. Essentially the average South African is wealthier/better off than the average Nigerian. South Africa's GDP per capita works out to roughly $6400 while Nigeria's works out to about $3200.
GDP per capita of the world's 50 biggest
What does the graph above look like if we ranked these countries based on GDP per capita? For starters the biggest economy in the world, the USA, only ranks 8th when looking at their GDP per capita. The graph below works on the same premise as the graph above, except instead of using economic size as the ranking variable, GDP per capita is used (hover of a bar to get more detail on it). GDP per capita data from the World Bank was not available for Korea, Iran, Venezuela, Hong Kong and Egypt (hence no graphic representing these countries even though they are represented in the 50 biggest economies in the world graph above).
What we are trying to show is not only how small South Africa is in terms of the size of our economy when compared to the biggest economies in the world. but in addition to this the GDP per capita picture for South Africa looks even worse. This is not necessarily the case for other countries. The country that has the highest GDP per capita of the 50 biggest economies in the world, Norway, is in fact only the 26th largest economy in the world. Qatar whom is ranked 2nd in terms of GDP per capita is the 50th largest economy in the world.
The picture for the African giants, South Africa and Nigeria, gets worse when looking at GDP per capita instead of economy size. South Africa is ranked as the 33rd largest economy in the world, and they rank 37th in terms of GDP per capita. Nigeria is ranked as the 22nd largest economy in the world, and they rank 42nd in terms of GDP per capita. South Africa and Nigeria has a long way to go to uplift thousands upon thousands of citizens out of abject poverty.
The picture for the African giants, South Africa and Nigeria, gets worse when looking at GDP per capita instead of economy size. South Africa is ranked as the 33rd largest economy in the world, and they rank 37th in terms of GDP per capita. Nigeria is ranked as the 22nd largest economy in the world, and they rank 42nd in terms of GDP per capita. South Africa and Nigeria has a long way to go to uplift thousands upon thousands of citizens out of abject poverty.