The business cycle in South Africa

Résumé du document

The economic powerhouse of the continent, South Africa produces one fifth of its entire production. The gross domestic product (GDP) is four times that of its southern African neighbors and covering around 25% of the entire continent's GDP. Following the expansion of the global economy, South Africa is acquainted with a real growth rate of GDP of 5%, in 2006 (SARB, 2007: S-148). South Africa's economy has been in an upward phase of the business cycle since September 1999 - the longest period of economic expansion in the country's recorded history. As Mohr (2005: 63) defines, the business cycle "refers to the fluctuations in the overall level or pace of economic activity". It is "the pattern of expansion (recovery) and contraction (recession) in economic activity relative to its long-term trend". After analyzing the current state of the business cycle in South Africa, it is relevant to study its prospects.

Extraits

[...] After studying the current state of the business cycle in South Africa, we can now establish some prospects. The current prospects for the business cycle in South Africa According to Pickworth (2007), South African seasonally adjusted leading economic indicator has been reported by the SARB to have dipped in a row to 127.9 in July.” This indicator was 128.3 in June and 129.2 in May. The leading indicator is a relevant variable because it illustrates consistent relationship over time with business cycle movements and turning points” (Mohr, 2005: p. [...]

[...] The Business Confidence Index (BCI) compiled by the South African Chamber of Business (SACOB). According to Mohr (2005: this monthly indicator is a “composite index that tracks the performance of 13 key economic indicators which have been judged by business to have the greatest bearing on the business mood.” The SACOB Business Confidence Index: 07 02/07 03/ 07 04/ 07 05/ 07 06/ 07 07/ 09 08/ The BCI bounced back to 98.7 in September 2007 from the August 2007 level of 98.1 the lowest BCI of the year. [...]

[...] I n conclusion, we can say that the South African economy has continued to experience a robust growth, but with a slight slowing down. This current analysis is confirmed by the expectations by the leading indicator and business surveys. South Africa will know a downswing in several months. Bibliography Bureau for Economic Research “Confidence declined to three-year [online]. Available from: http://www.ber.ac.za/ber/index.aspx [10th October 2007]. Burger, P Fiscal policy in South Africa. Business Conditions Analysis: MMB 720. University of the Free State, Bloemfontein, South Africa, 29th August 2007. Burger, P. 2007.The real sector and the monetary sector. [...]

[...] Pickworth, E SA Leading Indicators down. Business Report. [online] Available from: http://www.busrep.co.za/index.php?fSectionId=56 1&fArticleId= 5021160 [10th October 2007]. South African Chamber of Business “Business Confidence Index” [online]. Available from: http://www.sacob.co.za/BCI/bci_sep_07.pdf [10th October 2007]. [...]

[...] The current state of the business cycle in South Africa South Africa is currently in its longest upward. Globally economy activity of the country “continued to be fairly robust in the first half of 2007” (SARB, 2007: 1). Nevertheless, the GDP growth is estimated at in July 2007 in 2006) by the South African Reserve Bank (SARB). The SARB uses over 200 economic times series a set of observations of a phenomenon taken at different points in time (Mohr, 2005: p.65) to determine the turning points of the South African business cycle, “which is currently at a high point” (Pickworth, 2007). [...]