South African Economic Analyzsis

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Kyle Horak
November 2012
Global Marketing
Professor: Theodore Lapekas
Economic Analysis

The South African economy is widely affected by the decisions that the government makes and unfortunately due to its history still experiences affects from the Apartheid era. Many upper class citizens and even middle class citizens have immigrated to other countries in order to find a safe community in which they can live. High crime and illiteracy rates make it a volatile market for foreign investors.

South Africa has an estimated population of 49 million people of which is a middle-income economy. This is a good distribution of wealth however with a large population poverty levels are still high. It is currently an emerging market rich in natural resources and opportunity. South Africa’s annual GDP rate is an estimated $555 billion US dollars and is experiencing a 3.1 annual growth rate. The public sectors within its markets are well developed but also still very third world, this can make legal paper work in some cases difficult and in other sectors corruption is still widely found. The JSE stock exchange is the 18th largest in the world and considering the time in which South Africa gained it’s independence from the British, it’s a fairly young country.

There is also fairly modern infrastructure that supports a relatively efficient distribution of goods to major urban areas through out the country. Growth was vigorous during 2004 to 2007 as South Africa received the benefits of macroeconomic stability and a global commodities boom but began to slow down in the second half of 2007 due to an electricity crisis inside South Africa and the 2007 global financial crash. GDP fell nearly 2% in 2009 but recovered in 2010-11. Unemployment remains high and outdated infrastructure has constrained growth. State power supplier Eskom encountered problems with aging plants and meeting electricity demand causing "load-shedding" cuts in 2007 and 2008 to residents...
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