SA Migration International

News Articles

SA`s economic outlook over the next year: Three steps forward, two steps back

Source: Fin24, 18/05/2022

SA’s economy has been stagnant for 10 years.
• Stiff global headwinds are forecast for the SA economy, the Bureau of Economic Research at Stellenbosch University heard on Tuesday.
• China, the US and Russia are dramatically affecting global growth.
• BER senior economist Craig Lemboe described the outlook for the economy over the next year as `three steps forward, two steps back`.
The Goldilocks days when regulators were able to ensure the global economy was not too hot, too cold but just right, are over as policymakers face an `unprecedented number of obstacles`, the Bureau of Economic Research (BER) at Stellenbosch University heard on Tuesday.
Speaking at a BER’s presentation, emerging markets specialist Larry Brainard of global advisory firm TS Lombard said that developments in three key areas �` China, the US and Russia �` would dramatically affect global growth and create stiff headwinds for the SA economy.
SA’s economy has been stagnant for 10 years and is struggling to recover from the Covid-19 pandemic. The BER has forecast growth of 2.4% for 2022, but says possible scenarios are weighted to the downside, which could see only 1.5% GDP growth.
Brainard said the global environment had created `a pretty dire outlook` for emerging markets.
In China, the impact of the zero-Covid-19 policy, which has seen parts of China in total lockdown, `will deliver a very significant hit to growth this year`, said Brainard. While the official government projection is for 5.5% growth, Brainard says he now expects China’s GDP growth to be around 3.2%.
`This is a major, major change to the outlook,` he says.
While China needs to rethink its Covid-19 strategy, it is unlikely to do so for political reasons as its leader, Xi Xinping, aims to be elected for an unprecedented third term later this year. It also cannot step up economic stimulus as it has in previous crises because of the number of resources being consumed by local governments to control the pandemic.
Thirdly, the Chinese property sector, which has been running on a kind of Ponzi scheme �` funding development with future sales �` is imploding, says Brainard, which will impact prices for industrial metals that go into house building.
SA is shielded from falling metal prices to some extent, as coal prices - for which demand has increased - and platinum group metals are expected to stay high. This will partly offset high energy prices resulting from the war in Ukraine.
The second global factor inhibiting growth will be the interest rate hikes by the US Federal Reserve as it struggles to catch up with inflation, which has reached 8%.
`The Fed is behind the curve. Interest rates will have to go up by 4% by mid-year. Our expectations are that the Fed will continue hiking in an economy that is slowing. That is very different from the model that we are used to,` he says.
When faced with crisis, the US government has responded with massive stimulus in the past. The outcome this time will be an environment where inflation is high, interest rates are high, and growth is slowing. He says this has important implications for SA, which is also behind the curve in tightening rates. Emerging markets tend to `keep up` with Fed rate hikes to avoid investment portfolio outflows and to anchor inflation expectations.
The third global factor is the war in Ukraine and the resulting spike in energy and food prices. Says Brainard:
`Russia is losing the war and is on track to becoming a third-grade economic power. Food inflation will be the key worry for SA. We are moving into a world of high energy prices, and with Eskom buying diesel, this will be a major hit to the economy.`
BER senior economist Craig Lemboe described the outlook for the economy over the next year as `three steps forward, two steps back`. While corporate sentiment indicated a slight improvement, with a survey of manufacturers’ indicating an uptick in investment, it will be some time before the structural reforms to the economy takes effect.
With its baseline GDP growth at 2.4%, the BER says `a low-growth scenario` could come about if additional sanctions hit Russian energy, leading to global stagflation. In combination with tighter financial conditions, this could slow growth to 1.5%.
The upside scenario of 2.8% GDP growth could come about if SA can improve railway operation and an earlier rollout of green energy investment. In this scenario, commodity prices will lead to higher export growth, which will prolong the current account surplus, improving confidence and investment.
www.samigration.com

Search

Latest News

Highly skilled professionals are leaving South Africa to move to other countries, while the local economy faces a skills shortage. Data from The Outlier revealed that there were just over 900,000 South Africans living abroad in 2020. This number has increased steadily over the past 20 years, from 500,000 in 2000, according to Stats SA’s Migration Profile Report for South Africa 2023. Of these 900,000 people, 7 out of 10 are living in either Europe or Oceania. In particular, Australia and New Zealand have seen a large growth in South African residents. In 2020, around 273,000 South Africans were living in those two countries, more than double the 106,000 who lived there in 2000. The UK remains still the top destination for South Africans who leave the country.... Read more...

JOHANNESBURG - Minister of Home Affairs Aaron Motsoaledi said that while the White Paper on Citizenship, Immigration and Refugee Protection had been gazetted, there were amendments that needed to be made to the legislation before it could be passed into law. The White Paper is proposing an overhaul of the country`s migration laws, with the aim of tightening rules around allowing migrants into the country.... Read more...

The DA has been inundated with complaints that the Department of Home Affairs (DHA) systems are offline, resulting in long queues and delayed processing of documents. Through questions posed to the Minister, the DA can now reveal that the DHA has lost over 77 years’ worth of working hours due to system downtime and load-shedding from 2019 to date. Concerningly, this data only relates to hours lost for the application of smart IDs, meaning decades more of working hours could have been additionally lost in other spheres such as passport or visa applications. The lost hours are largely due to system downtime, surpassing load-shedding. In the 2022/2023 financial year, where we experienced extensive load-shedding, system downtime was the cause of 41 691 hours lost (17 years), whereas load-shedding caused around 9 322 hours lost (4 years) at DHA civic offices on the production of smart IDs.... Read more...

Document proposes overhauling the Citizenship Act, the Refugees Act and the Immigration Act and a review of the international treaty on refugee protection Home affairs minister Aaron Motsoaledi says the cabinet has approved a white paper overhauling the country’s immigration laws after “robust engagements” that resulted in “wide support” of the document’s policy positions.... Read more...

Minister Aaron Motsoaledi’s indifference to the plight of those affected by his decisions is appalling In the tumultuous seas of immigration law, where uncertainty looms and families are left adrift in bureaucratic limbo, the department of home affairs has emerged as a sinking ship. As a director of a firm of immigration attorneys I’ve witnessed first-hand the dire consequences of the department’s negligence and incompetence. Today, I raise my voice not just as an attorney but as a concerned citizen, urging for a radical overhaul to salvage what remains of our immigration system. We have tirelessly fought battles in the courtroom against home affairs’ disregard for agreed-upon time frames. Countless cases have landed on our desks, each one a testament to the systemic failures plaguing the department. We’ve seen cases where contempt applications were the only recourse, as the department brazenly ignored court orders.... Read more...

Home Affairs Minister Dr Aaron Motsoaledi has said the public has shown great support for the final White Paper on citizenship, immigration and refugee protection which appeared in the Government Gazette on Wednesday. Briefing the media, he addressed what he saw as a long-overdue need to replace an outdated Citizenship Act, as well as enact proposed changes to existing legislation.... Read more...

The Department of Home Affairs is going through a torrid time. As The South African reported earlier this year, naturalised South Africans are being refused smart ID cards. This is despite having the same constitutional rights as every other South African citizen. Now, Home Affairs minister Aaron Motsoaledi has decided to clarify the reasons behind lengthy delays for spousal visas.Business Tech reports that some spousal (and relatives) visas are taking up to two years to process. The minister of Home Affairs says this is because documentation and claims need to be verified. Replying to a parliamentary Q&A session, the minister says the issue is being addressed by the Home Affairs ‘Backlog Eradication Plan’.... Read more...

outh Africa seeks highly skilled individuals to live and work in SA. SA Migration Services will provide professional assistance to arrange your work visa for you if you qualify. Work Visas are regulated in terms of Section 19, Regulation 18 and items 18 (1), 19(2), 20, 21 and 22, of Schedule A.... Read more...

Table of Contents * What is generative AI in simple terms? * How does generative AI work? * Examples of generative AI * Types of generative AI models - What is ChatGPT? - What is Google Gemini? • Benefits of generative AI • Use cases of generative AI • Dangers and limitations of generative AI • What is the difference between generative AI and general AI? • What is the difference between generative AI and machine learning? • What is the difference between generative AI and regenerative AI? • How big a role will generative AI play in the future of business?... Read more...

Home affairs minister Aaron Motsoaledi says surveillance drones, speedboats and hand-held biometric devices have been ordered to help manage the country`s porous borders. South Africa`s land borders cover about 4,700km. Insufficient security and the poor state of fencing make the borders insecure, with foreigners entering illegally and allowing other acts of criminality.... Read more...