Macroeconomics: Overview of the South African economy

Résumé du document

The most powerful and the most developed economy of the continent, South Africa produces one fifth of its entire production. The gross domestic product (GDP) is four times that its southern African neighbours 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 is an upward phase of the business cycle since September 1999 (the longest period of economic expansion in the country's recorded history). According to Fourie (2001: 89), "while the South African economy is relatively strong in the African context, in the world context it is small." Nevertheless, since 2004, GDE has exceeded the GDP, which means that South Africa exports less than it imports. South Africa is "living beyond its means" To a certain extent, this fact can be explained by a huge growth in the real final consumption expenditure by households.

Extraits

[...] According to the South African Reserve Bank (2007: taxation provides almost R millions en 2007 and R millions in 2006. This growing has for effect (in the Keynesian model) a decrease in income, which can be explained by these Keynesian chain reactions: Taxation ( decrease the disposable income of households and after-tax profits of companies ( aggregate expenditure decreases ( production decreased ( employment decreased ( Income decreased This growing is mainly the result of an increase in aggregate consumption and incomes. [...]

[...] Available from: http://www.info.gov.za/speeches/2007/07022115261001.htm [2007, August 26th]. Morh, P Economic indicators. 3rd edn. South Africa: Unisa. SARB South African Reserve Bank. [Online] Available: http://www.reservebank.co.za [2007, August 26th]. [...]

[...] Lansdowne: Juta Fourie, F.C. v N. & Burger, P. Fiscal sustainability and the South African transformation challenge. South African Journal of Economics, 71:4. The Quarterly Bulletin of the South African Reserve Bank. June 2007. No 244. Minister of Finance “Budget Speech 2007”. [online]. [...]

[...] The monetary policy The aim of the monetary policy, conducted by the South African Reserve Bank is to ensure economic growth, a high level of employment and a stable average price level. According to the three latest MPC meetings, the level of price is growing each year, as we said in the previous point. This can be mostly explained by an increase of the petrol (R0,69 per litre in April 2007, South African Reserve Bank 2007: which has consequences on food prices and some others categories. [...]

[...] In this way, the two policies are not in harmony with each other. Nevertheless, these policies do not enough for maintain robust and sustainable development in South Africa. Resources to finance human development (human capital investment, for instance) must grow, which requires a higher economic growth rate. References Bortha, L.J. nc. How to think and reason in macroeconomics. Department of Economics. University of the Free State, Bloemfontein, South Africa. Burger, P The basic model: The foreign sector. Business Conditions Analysis: MMB 720. [...]