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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.
Growth in credit extension to households increased somewhat this year and households have become increasingly vulnerable to adverse economic shocks. While most household leverage ratios have only increased slightly (so far) this year, the household debt to disposable income ratio remains high. Moreover, the debt-service cost to disposable income ratio has started to rise notably. Hence, households are more vulnerable in terms of the affordability of credit. This is especially relevant with further interest rate hikes in 2016 firmly on the cards. Successive interest rate increases, on a relatively high level of debt, can lead to a sharp acceleration in the debt-service cost ratio. This places downside risk on our consumption expenditure forecast.
Read MoreThe manufacturing sector’s contribution to the South Africa economy has been declining for a number of years. Against this backdrop, we asked industry expert Henk Langenhoven to explore ‘the future of manufacturing in SA’, and in particular the prospects for the metals and engineering sector.
Read MoreWhat is the potential growth rate of the South African economy? Given the various constraints on growth, including a dysfunctional school system, insufficient electricity provision, infrastructure backlogs and policy uncertainty, to name but a few, what is a realistically attainable rate of growth? In this research note, various methodologies are employed in estimating the potential growth rate of the South African economy. Results show that the potential growth rate has dropped significantly after the Global Financial Crisis. Large-scale structural reforms in both the product and labour markets are required in order to lift the economy to a higher, yet sustainable, growth path.
Read MoreThe objective of this note is to obtain a better understanding of the impacts the SA economy may experience once interest rates in the US begin to rise. It is generally expected that US interest rates will begin to rise in the foreseeable future, not least by the US FOMC.
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