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Research Notes are more in-depth analyses undertaken by BER economists and consultants.
Brief note intended as a more regular interface with our clients.
In-depth analysis of important political developments in South Africa.
The Impumelelo Economic Growth Lab is a unit at the BER, focussing on generating policy-relevant work and capacity building to achieve economic success in South Africa. This work is freely available to access on our website.
The South African platinum mining industry has lately been in the spotlight for all the wrong reasons. Despite the significant role and contribution of the platinum sector to the South African economy, the industry is currently in a challenging position due to unprecedented labour disruptions, depressed global demand and a declining platinum price. Increasing production costs (mainly due to wages and electricity costs) are further exacerbating the situation. Platinum mining and related activities are an integral part of the domestic industrial landscape and, as such, the sector should be fully understood to better comprehend the potential impacts of a slowdown in the platinum group metals (PGM) sector on the broader economy. An economic impact analysis (EIA) allows one to assess the platinum industry’s total contribution to the South African economy, as opposed to simply the impact on mining production and exports.
Read MoreThe rapid acceleration of credit growth and large debt accumulation in China following the global financial crisis in 2008 has heightened concern about the sustainability of the Chinese growth model. The IMF and others argue that the short-term risk of a financial crisis and / or Chinese hard landing is relatively low since the authorities have a number of policy tools to prevent a crisis. However, the postponement of reforms to rebalance the economy away from an over-reliance of fixed investment to consumer spending will raise the risk of a hard-landing scenario over the medium term.
Read MoreThe RMB/BER business confidence index (BCI) increased from 46 in the third quarter to 51 in the fourth quarter of 2014. This is the first time since early 2013 that confidence is back in net positive territory (if only just). The increase stemmed from large improvements in building and manufacturing confidence which, combined, more than compensated for a small decline in retail confidence. Sentiment among wholesalers and new vehicle dealers remained essentially unchanged.
Read MoreRapid growth and changes in the racial composition of the middle class over the past decade have resulted in the identification of the black middle class group as a distinct consumer category. The paper explores current middle class expenditure patterns, highlighting variation in allocations towards education, savings and investments, durable household goods and visible consumption.
Read MoreFears of a Chinese ‘hard landing’ have resurfaced in 2014 on the back of concerns over the increase in local government debt levels, a possible property price bubble and the rise of the shadow banking sector. The ‘hard landing’ scenario modelled in this note (using the IMF’s Global Projection Model) assumes a severe tightening of credit conditions following the crash of the housing market and default by major real estate developers, and also assumes a drop in confidence by domestic and international investors. The Chinese ‘hard landing’ results in a substantial reduction in both global and domestic GDP growth in 2014/15.
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