GLOBAL PROSPECTS AND THEIR LIKELY IMPACT ON SOUTH AFRICA

INDEX:
Table of Contents
Global prospects and their likely impact on South Africa 1
INDEX: 1
Strength of the Recovery 2
Developed Countries: 2
Emerging Markets: 2
Risks to the Global Economy 3
Exit Strategy from Policy Stimulus 4
Repair and reform of the financial sector 4
Fiscal Crises and underinvestment in Infrastructure 4
Socio and Political Implications of Unemployment and Private Demand 5
Asset Price Collapse and the risk appetite of investors 5
Return to Previous Growth Path or Not 5
Will the current crises be “DÉJÀ VU ‘” for the world wide economy? 6
Fundamental Changes in Origins & Nature of Economic Activity 6
Global warming / Climate Change: 7 …show more content…

These figures demonstrate that India has been developing the same kind of critical mass of broad-based economic development and growth that has characterised China’s economy over the past decade.
India enjoys an investment rate of close to 40% of GDP. Such a high rate of investment could deliver growth of more than 10% per annum, since India’s output per head (at purchasing power parity) is roughly a fifteenth of that of the US. (www.ft.com)

RISKS TO THE GLOBAL ECONOMY
This recession showed us just how integrated and interconnected the world’s economies are today. Systemic risk as defined by the World Economic Forum is “the potential loss or damage to an entire system as contrasted with the loss to a single unit of that system. Systemic risks are exacerbated by interdependencies among the units often because of weak links in the system. These risks can be triggered by sudden events or build up over time with the impact often being large and possibly catastrophic”. Under sway from reports from the IMF and the World Economic Forum (WEF), we outline the following as the most significant risks to the global economy in the next five years:
1. Exit strategy from support stimulus
2. Repair and reform of the financial sector
3. Fiscal Crises
4. Socio and Political Implications of Unemployment and Private Demand Issues
5. Asset Price Collapse and The Risk Appetite of Investors
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