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In Africa, South Africa is ranked as the third largest economy in terms of GDP (dollar
value of its GDP) after Nigeria and Egypt. Attempts to unpack this development have
led to a number of possible reasons, stretching from administrative to real performance.
The reasons include the re-basing of Nigeria’s GDP; the depreciation of the Rand
against the Dollar (especially in managed exchange rate regimes); and falling growth
on a sustained basis – impacting on the relative size of the GDP.
Exchange Rate
The Rand exchange rate to major trading currencies strengthened slightly in February
and March 2016 mainly due to:
• SARB’s commitment to maintain price stability
• National Treasury’s austere fiscal stance
• Positive improvement in commodity prices, especially gold and platinum.
Figure 43 Exchange Rates
Source: INET PROVINCIAL OUTLOOK NATIONAL OUTLOOK GLOBAL OUTLOOK GAP HOUSING INVESTOR NARRATIVE SPOT THE OPPORTUNITY PORTFOLIO INSIGHTS KHULISA NEWSLETTER ELECTRIC VEHICLES ENERGY SECURITY LOOKING AT GDP
The moderate recovery witnessed in June is mainly attributed to the decision by all rating
agencies to reconfirm their investment grade ratings (S&P and Fitch) and investment
grade plus one notch (Moody’s). A stable exchange rate is necessary for domestic
price stability.
Business Confidence
The Business Confidence Index shows a sharp decline, which negatively affects
economic growth.
QUARTERLY ECONOMIC BULLETIN 2016 83
