Page 8 - RMI Annual Report 2022
P. 8
Economic Overview
South Africa’s economic underperformance continues to be a major
concern. Since 1995, South Africa has only managed to achieve real economic
growth – measured as being higher than the world average – 6 times in the
past 27 years.
In fact, since 2010 the country has undershot than was anticipated at the start of 2022.
world growth by an average of 1.9 percentage Combined with the war in Ukraine, strict
points a year. In simple terms: if we were COVID-19 lockdowns in China, higher inflation
travelling in a car, South Africa would be driving for longer, and steeper than expected interest
at 60 km/h while the global average is driving rate increases, this continues to have a
above 100 km/h. significant negative impact on the expected
earnings for businesses.
The real lost opportunity: if South Africa had
matched the average rate of economic growth Stagflation
in the rest of the world over this period, its This situation raises the risk of stagflation,
economy would be 28 percent larger than it with potentially harmful consequences for
will be at the end of 2022. middle- and low-income economies alike. In
support of this, a recent report by RMB Global
For the calendar year 2022, the outlook in Markets adds that the global growth outlook
the rest of the world is also relatively bleak. is vulnerable to both the impact of elevated
According to Bartizan Capital, economic commodity prices and increasingly restrictive
growth around the globe is likely to be lower monetary policies.
1.5Difference between Growth in SA's SA growing faster than the world.
1.0Real Gross Domestic Product SA growing slower than the world.
0.5 and World Growth (% points)
0.0
-0.5 1995
-1.0 1996
-1.5 1997
-2.0 1998
-2.5 1999
-3.0 2000
-3.5 2001
-4.0 2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Source: Nedlac, 2022.
South Africa’s economic underperformance continues to be a major
concern. Since 1995, South Africa has only managed to achieve real economic
growth – measured as being higher than the world average – 6 times in the
past 27 years.
In fact, since 2010 the country has undershot than was anticipated at the start of 2022.
world growth by an average of 1.9 percentage Combined with the war in Ukraine, strict
points a year. In simple terms: if we were COVID-19 lockdowns in China, higher inflation
travelling in a car, South Africa would be driving for longer, and steeper than expected interest
at 60 km/h while the global average is driving rate increases, this continues to have a
above 100 km/h. significant negative impact on the expected
earnings for businesses.
The real lost opportunity: if South Africa had
matched the average rate of economic growth Stagflation
in the rest of the world over this period, its This situation raises the risk of stagflation,
economy would be 28 percent larger than it with potentially harmful consequences for
will be at the end of 2022. middle- and low-income economies alike. In
support of this, a recent report by RMB Global
For the calendar year 2022, the outlook in Markets adds that the global growth outlook
the rest of the world is also relatively bleak. is vulnerable to both the impact of elevated
According to Bartizan Capital, economic commodity prices and increasingly restrictive
growth around the globe is likely to be lower monetary policies.
1.5Difference between Growth in SA's SA growing faster than the world.
1.0Real Gross Domestic Product SA growing slower than the world.
0.5 and World Growth (% points)
0.0
-0.5 1995
-1.0 1996
-1.5 1997
-2.0 1998
-2.5 1999
-3.0 2000
-3.5 2001
-4.0 2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Source: Nedlac, 2022.
