Tag Archives: global recession

SA prepared to protect its economy

The South African government is prepared to act in order to cushion the overall economy from the current global economic scenario, which unfortunately presents significantly greater uncertainty for developing nations.

“Precisely what we suggest is that we are going to assess and manage debt; we intend to make certain we do more than enough for infrastructure. We are going to do things we have to do to refloat the economy,” Finance Minister Pravin Gordhan stated.

 

Finance Minister Pravin Gordhan

 

“Our own view is that it’s 60/40 against a double dip recession while other people are predicting a 50/5 chance, dependant upon the decisiveness with which other countries in the world actually starts to deal with its problems. We will have to wait and see,” said Gordhan. The National Treasury and the Reserve Bank have already released a press release that the country would keep an eye on the impact of the downgrading of the US and sovereign debt crisis in Europe in relation to the South Africa’s economy.

Last week, rating agency Standard & Poor downgraded the US credit rating, reduced from AAA to AA+. The Treasury has briefed Cabinet on the effect of global developments and additionally precisely what it meant for the economy. What was currently happening in the recovery stages (which usually take 5 years at the very least) following the 2008 global financial crisis was that political constraints, as with the US, are now being experienced.

“… At which brinkmanship was exercised by key political players [and] the problem of sovereign risk, countries were required to bail out their banks. That took on a lot of debt and in addition to the debt, historically developed countries have taken on too much debt,” said the minister, adding that South Africa’s debt to GDP ratio was between 34 and 35 percent this year, when compared to the 80 to 200 percent of Japan.

The uppermost level of debt to GDP that South Africa is predicted to reach is 40 percent. “Political brinkmanship and political dithering along with a absence of decisiveness in certain regions of the world has created uncertainty in the world concerning whether or not we are going to have measures to make sure that the right level of growth is achieved in South Africa,” said Gordhan.

 

South Africa is going to take a growth friendly strategy along with the consolidation of debt. “What we’re undertaking is monitoring the channels through which South Africa could possibly be impacted upon,” he was quoted saying, adding the fact that this may very well be by way of financial systems. Gordhan said South Africa’s financial regulatory system was basically sound. He explained that South Africa had made it through the first crisis and that “we will ensure we make it through.”

South Africa continues to be cautious about how precisely it borrows money and that it has not asked the general public to pay extra for what it has borrowed. “All of us intend to make certain that we are able to bounce back if required,” said the minister.

Regarding the issue of South Africa’s conditional R2.4 billion loan to Swaziland, Gordhan pointed out that South Africa is going to keep an eye on the situation in that country. He explained that a joint board, following a 2004 agreement, will get together annually or more times if required to monitor the situation.

 

Previously Cabinet spokesperson Jimmy Manyi stated the advance to Swaziland was not a loan from the South African fiscus but a guarantee that is backed by their own South African Customs Union (SACU) payments.

The three tranches to Swaziland is going to be paid dependant upon the proven fact that the Swazi government generates confidence building measures not to mention that fiscal and related technical reforms requested by the International Monetary Fund are put in place and that South Africa offers capacity building support. Additionally it is based on the pillar that there is co-operation in multi-lateral engagements.

Repayment of the loan is going to be carried out by debit order, which will be paid to that country by way of a debit order against the SACU account which happens to be held by South Africa’s Reserve Bank. The money, which will not be taken from taxpayers, is furnished by the Reserve Bank on a 5.5% interest rate.

Source: BuaNews

World Bank: African economy growing

Africa’s overall economy is without a doubt on the right track and may even come up with a quicker financial recovery from the recession when compared to the US. This is based on the World Bank’s Global Economic Prospects report for 2011.

The report, released in mid-January, forecasted that sub-Saharan Africa would most likely improve its gross domestic product (GDP) from 4.7% in 2010 to 5.3% for this year. That number might possibly be bumped upwards to 5.5% in 2012.

The report in particular mentioned that price levels in metals, minerals and oil, along with more significant investment in manufacturing and telecommunications companies, have definitely contributed towards the growth.


As indicated by Phumelele Mbiyo, Standard Bank’s Senior Africa Strategist for Global Market Research, the numbers suggest that economic activity, particularly in relation to mining and construction, is without a doubt growing in the region.

“The reason behind this type of increase is simply because prices for commodities are fairly high and they have enticed investment, in particular from emerging markets such as China,” he said.

Mbiyo is convinced an average person would most likely reap the benefits of these types of optimistic forecasts, as companies have the desire to seek the services of locals.


“There has already been increased employment of locals within the mining and construction industries. There is certainly destined to be a considerable amount of employment in future, primarily by European and American based companies who have invested heavily in mining in Africa.”

High continental growth

Having said that, the report pointed out the fact that the best growth rates were not necessarily to emerge from South Africa, the region’s traditional economic hub. Rather, the greatest figures originated from countries such as Nigeria, Angola, Kenya, the Republic of Congo, Ethiopia, Mozambique, Botswana, Zambia, Malawi, and Tanzania.

South Africa has been projected at 3.5% for 2011 in contrast to other countries from the other countries in the region were believed to grow at an average of 6.4% for the same year.


Mbiyo outlined that this is simply not for the reason that South Africa’s growth is slowing down, but instead for the reason that other countries are beginning completely new industries now not to mention coming from a low base whereas South Africa had already established exactly the same industrial sectors years ago.

“Angola is set to grow by 7% on average whereas Ghana will average 13% over the following two years. Simply because the latter is beginning to supply oil,” said Mbiyo.

He added that Africa should really at this time concentrate on sustaining growth mainly because the continent continue to lags behind other major developing and developed economies.

Source: mediaclubsouthafrica.com,

SA financial growth forecasts reduced for years ahead

The South African overall economy is forecasted to expand by 3.4 percent this year. According to the International Monetary Fund (IMF) this figure is down by .01 percent based on previous projections.

In the most recently released World Economic Outlook (WEO) statement update, the IMF reported that local overall economy is expected to grow by 3.4 percent, a negligible variation coming from the IMF’s WEO 2010 forecasts of .01 percent. The South African economic environment is anticipated to grow by 3.8 percent in 2012, equally down by 0.1 percent provided by earlier projections.

The IMF’s projection when it comes to growth in 2011 is actually in line with the South African Reserve Bank’s forecasts which actually actually adjusted its figures and forecasts last week for 2011 resulting in the similar growth forcasts of  3.4 percent. At the same time, the central bank left its projection for 2012 unchanged remaining at 3.6 percent.


Based on the latest report overall growth when it comes to emerging and developing economies continued to be strong in the third quarter buoyed as a result of well-entrenched private demand, still accommodative policy stances, and resurgent investment capital inflows.

With respect to the WEO nations located in sub-Saharan Africa have definitely recovered swiftly from the global economic crisis with the area predicted to grow 5.5 percent in 2011.

“However the actual tempo of the financial recovery has varied within the region. Output growth within the majority of oil exporters and low-income countries (LICs) is currently in close proximity to pre-crisis levels.


The actual financial recovery in South Africa along with its neighbours, on the other hand, has actually been a lot more subdued, highlighting the more severe influence of the collapse when it comes to world trade in addition to elevated unemployment levels which have been proving to be challenging to decrease,” it said.

Growth in emerging and developing financial systems is anticipated to continue to be buoyant at 6.5 percent a moderate slowdown from the 7 percent growth registered last year. Asian countries on the other hand continues to grow rapidly, it said.

Source: BuaNews, imf.org, economist.com, bbc.co.uk,

Why an Online Education is an ideal Option during a Recession

The financial credit crisis and stock market meltdown will certainly have a direct impact on household and domestic cash flow in addition to the capability to find the money for university and college. The college tuition fee, accommodation, text books, travel in addition to other college everyday expenditures are continuing to increase when the current economic climate seems to have deteriorated. Due to the current current economic conditions, it will likely be considerably more challenging to acquire an education loan. Parents are trying to find alternative education and learning choices for their children and online education and learning offers you the most effective education alternative which usually will accommodate for the limited education spending budget of any parents today.

Preceding this particular current economic crisis and downturn, students who elected to pursue their college degree and education online were generally experiencing and enjoying the benefits and advantages of an online education that provides all of them with a flexible study environment. However, with current economic climate that could quite possibly result in an economic recession, affordability associated with online degrees could become the most crucial contributing factor which experts claim will divert a large number of pro campus-based parents and students to decide on an online education.

Obtaining a college degree or diploma by means of online education program could possibly be a wise decision during the current economic downturn. Due to the fact online education makes it possible for individuals to logon to the courses and instructional classes from their residential home or virtually any location at their convenience, this does away with the headache and effort of traveling to and from the college, while at the same time, assisting to help you save when it comes to traveling costs and expenditure. Students who decide to study at campus-based college or university which may be far away from their home might need to relocate by renting a room along with a house which is in close proximity of the college or university; this additional cost could very well be saved by pursuing the identical college degree or diploma made available by means of an online education.

The vast majority of learning materials utilised in online degree programs are typically in digital format which are readily available for download directly from the online learning system of the college or university. Even though online colleges may possibly add some additional costs and service fees for the downloadable study materials and resources, this is still a saving however, if you do a comparison of the expense necessary to buy those published books and references that are required and mandatory by campus-based colleges.

An additional crucial benefit of online education to be the best education and learning alternative for people who have limited education and learning financial budgets is simply that the online students can consider to work at the same time while pursuing their degree. The vast majority of online degree programs incorporate some kind of overall flexibility that enables the students to plan their own individual pace of study. This particular benefit makes it possible for the students who happen to be working for extra income to arrange for their study time to accommodate for their working schedule. Furthermore, the students that happen to be working have no reason or need to rush to college after work; instead they are able to return home, take a relaxed bath,followed by a nice meal before having to logon to their online class from the comfort of their home.

Source: Amelia Turner, articlesbase.com, indiananext.org, fundforward.org, disaboom.com, gatesfoundation.org, geteducated.com

Global economic recovery for 2011 looks grim

The recovery from the worldwide financial crisis continues to be confronted with setbacks ever since the middle of 2010 additionally , the prospect for development in next year remains grim, states a brand new UN document pre-released on Wednesday.

The particular annual United Nations document titled the “World Economic Situation and Prospects 2011 (WESP)” pointed to high unemployment rates, fiscal tightening up and the risk of international currency wars as the primary risks to global economic recovery.

The full report will be released in 2011.

Based on UN expectations, the world economy will most likely increase by 3.1 percent in next year and 3.5 percent in 2012 – most certainly lower than the numbers needed to recover the jobs lost during the economic crisis.

Rob Vos, director of the development policy and analysis division of the UN Department of Economic and Social Affairs (DESA), told reporters that “we are not out of the woods yet and greater risks are looming.”

The latest tensions around currency and trade, a weakening US Dollar, as well as exchange rate unpredictability have all contributed to an unclear outlook for next year and 2012.

“We foresee many downside risks in the next two years,” said Vos.

Countries have already begun to enact protective monetary measures to maintain investment capital flowing into their financial systems. “There is still much more finger pointing,” than concrete policies, said Vos.

While the major financial systems of Europe, Japan and the United States continue to pursue uncoordinated monetary policies, turbulence and uncertainty in worldwide financial markets will continue to persist.

“Failure to arrive at more coordinated policy responses aimed at a more benign global rebalancing will put the process of economic recovery and the stability of financial markets at further risk,” notes the report.

In the mean time, the WESP report illustrates substantial lack of employment worldwide as “the Achilles heel for the recovery.”

The global economy will need to create close to 22 million fresh jobs in order to get  pre-crisis employment levels, said Vos.

To prevent further stagnation in the worldwide economic recuperation and a “double dip recession,” world leaders will need to confront significant policy issues, said Vos.

The particular document outlines five major challenges facing policy makers, which includes: delivering additional fiscal stimulus, redesigning policies aimed at job growth, obtaining better synergy between fiscal and monetary stimulus, ensuring the provision of development finance, and coordinating policies amongst major economies.

Source: BuaNews, internet-marketing-london.com, worldslatestnews.com, topnews.in, abcnews.go.com, Reuters.com