1 / 32

Quarterly Press Conference

Quarterly Press Conference. 2009 OUTLOOK: INVESTING IN A SLOW-GROWTH WORLD. 27 January 2009. Economic Outlook: Rian le Roux Chief Economist, OMIGSA “The global slowdown and its impact on SA”. 30. 30. SA leading indicators. Trading partner leading indicators. 20. 20. 10. 10. 0. 0.

avi
Télécharger la présentation

Quarterly Press Conference

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Quarterly Press Conference 2009 OUTLOOK:INVESTING IN ASLOW-GROWTH WORLD 27 January 2009

  2. Economic Outlook: Rian le RouxChief Economist, OMIGSA“The global slowdown and its impact on SA”

  3. 30 30 SA leading indicators Trading partner leading indicators 20 20 10 10 0 0 -10 -10 -20 -20 63 66 69 72 75 78 81 84 87 90 93 96 99 02 05 08 SA closely linked to the global economic cycleFit has tightened since the end of isolation from early 90’s Source: SA Reserve Bank

  4. 15 75 SA’s big 4 commodity export price index, % ch Trading partner leading indicators, % ch 10 50 0 0 -10 -50 -15 -75 86 89 92 95 98 01 04 07 10 Transmission mechanism from global to SA via commodity prices, export volumes, rand and interest rates

  5. SA export volumes & global GDP growth 20 10 World GDP growth SA export volume growth (ex gold) 10 5 0 0 -10 -5 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

  6. SA car exports: Global slump starting to show 000’s per month 40 40 30 30 20 20 10 10 0 0 95 97 99 01 03 05 07 09

  7. 30 30 Prime rate 20 20 10 10 0 0 Trading partner leading indicators -10 -10 85 88 91 94 97 00 03 06 09 SA interest rates and the global cycleEarly rise in local rates probably prevented an acute rate crunch

  8. 10 10 Current account as % of GDP 5 5 0 0 -5 -5 -10 -10 85 87 89 91 93 95 97 99 01 03 05 07 09 Current account deficit remains a risk to the rand and interest rate outlook

  9. Deep and broad-based recession (across sectors and economies): - Some really shocking real economy numbers - Round 2 of the financial crisis? Classic forecasting error occurring: - Trend predicted correctly (downturn), extent hugely underestimated - Causing ongoing financial market concern Current global picture

  10. Some shocking numbers reflect the unexpected severity of the global slump 1400 450 Total: -10% from peak Ex autos/gas: -4½% from peak 400 1200 300 1000 200 800 100 600 90 92 94 96 98 00 02 04 06 08 10 90 92 94 96 98 00 02 04 06 08 10 US retail sales, nominal $ bn Japan machinery orders, yen trn

  11. Global trade collapsesExternal trade growth China USA 30 60 Exports Exports Imports 50 Imports 20 40 30 10 20 0 10 0 -10 -10 -20 -20 98 00 02 04 06 08 98 00 02 04 06 08

  12. GDP forecasts for 2008 & 2009Despite deep forecast cuts, risks remain to the downside 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 6 6 2008 2009 4 4 2008 2009 2 2 0 0 Economist survey -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 07 08 09 07 08 09 G7 Developing world

  13. World GDP & consensus forecasts % ch 10.0 10.0 Emerging economies World 7.5 7.5 Developed 5.0 5.0 2.5 2.5 0.0 0.0 -2.5 -2.5 80 83 86 89 92 95 98 01 04 07 10

  14. Current global picture From inflation worries to deflation panic

  15. Global inflation: falling fast Y-o-y % change Y-o-y % change 8 20 Germany Greece Russia Malaysia SA Canada UK Japan Saudi Arabia Mexico USA Switzerland Estonia Thailand 6 Italy Belgium Turkey Brazil 15 France Australia Israel Singapore Sweden China 4 10 2 5 0 0 -2 -5 06 07 08 09 06 07 08 09

  16. Current global picture Policymakers pulling out all the stops

  17. Rates cut aggressively over a broad frontFiscal packages close to 2% of Global GDP 30 20 Euro SA USA China UK Poland Australia 20 Korea Japan 10 Hong Kong 10 0 0 -10 -10 90 93 96 99 02 05 08 90 93 96 99 02 05 08

  18. Current global picture Key questions:- Will it work?- If so, when will things start to stabilise?- How deep the downturn in the meantime?: Big worries here History suggests that sudden & deep slumps are typicallyfollowed by sharp recoveries – will this one be different?

  19. Recoveries, when they come, can be quickSignificant obstacles this time, but surprise potential is risingRisk is more severe weakness first 10 10 US employment (% change) 5 5 0 0 -5 -5 51 56 61 66 71 76 81 86 91 96 01 06 11

  20. World GDPConsensus forecasting reasonable recovery in 2010 % change 10.0 10.0 Emerging economies World 7.5 7.5 Developed 5.0 5.0 2.5 2.5 0.0 0.0 -2.5 -2.5 80 83 86 89 92 95 98 01 04 07 10

  21. SA Outlook for 2009 No escaping the global downturn, but SA is partly isolated: - No local financial sector crisis or serious credit crunch - Exchange rate lends welcome protection - Infrastructure drive will lend crucial support to the economy - Falling inflation will boost real household incomes - Lots of policy firepower available (monetary and fiscal) Difficult conditions in H1:- Some sectors in deep recession (motor, residential construction, mining, exporters, small business) Some improvement in H2:- Lower interest rates, lower petrol price, lower general inflation & fiscal measures should support consumer spending- Government infrastructure drive to maintain momentum

  22. Downside risks can not be ignored, though Severe export slump Private investment slump Job shedding Rand slump Policy error

  23. SA vs Global GDP growthNo escaping the global slump, but SA a little better protected this time 10 10 World GDP growth SA GDP growth 5 5 0 0 -5 -5 -6 -6 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

  24. Welcome support from investment 20 20 World GDP growth SA GDP growth Investment growth 10 10 0 0 -10 -10 -20 -20 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

  25. Welcome support from investment 30 30 World GDP growth SA GDP growth Investment growth 20 Public sector investment growth 20 10 10 0 0 -10 -10 -20 -20 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

  26. SA Inflation picture 40 40 CPIX petrol Food 30 30 CPIX CPIX excl food & petrol 20 20 10 10 0 0 -10 -10 -20 -20 00 02 04 06 08

  27. SA Inflation outlook 40 40 CPIX petrol Food 30 30 CPIX CPIX excl food & petrol 20 20 10 10 0 0 -10 -10 -20 -20 00 02 04 06 08

  28. Food inflation: Stabilising? Y-o-y % change 50 50 Stats SA 40 40 ERU 30 30 20 20 10 10 0 0 -10 -10 -20 -20 95 97 99 01 03 05 07 09 Meat, vegetables & fruit

  29. Inflation forecast 14 14 • Forecast with new weights & rebasing • Assumptions: Rand: 9.75 end ’09 Oil: $60/bbl end ’09 Food: 8% end ’09 Eskom: 30% ’09; 30% ‘10 12 12 10 10 8 8 6 6 4 4 2 2 97 99 01 03 05 07 09

  30. Interest rate outlook350 bps of cuts in the cycle – risk is faster & more cuts 30 30 Prime rate & Base Case forecast Alternative Scenario 25 25 20 20 15 15 10 10 5 5 0 0 90 92 94 96 98 00 02 04 06 08 10

  31. SA Macro forecasts for 2008-2010 updated : 07.01. 2009

  32. Regulatory Information Old Mutual Investment Group (South Africa) (Pty) Limited Physical Address: Mutualpark, Jan Smuts Drive, Pinelands, 7405 Telephone number: +27 21 509 5022 Old Mutual Investment Group (South Africa) (Pty) Limited is a licensed financial services provider, FSP 604, approved by the Registrar of Financial Services Providers (www.fsb.co.za) to provide intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 37 of 2002. Old Mutual Investment Group is a wholly owned subsidiary of Old Mutual (South Africa) Limited. Reg No 1993/003023/07. The investment portfolios may be market-linked or policy based. Investors’ rights and obligations are set out in the relevant contracts. Market fluctuations and changes in rates of exchange or taxation may have an effect on the value, price or income of investments. Since the performance of financial markets fluctuates, an investor may not get back the full amount invested. Past performance is not necessarily a guide to future investment performance. Personal trading by staff is restricted to ensure that there is no conflict of interest. All directors and those staff who are likely to have access to price sensitive and unpublished information in relation to the Old Mutual Group are further restricted in their dealings in Old Mutual shares. All employees of Old Mutual Investment Group are remunerated with salaries and standard short-term and long-term incentives. No commission or incentives are paid by Old Mutual Investment Group to any persons. All inter-group transactions are done on an arms lengths basis. In respect of pooled, life wrapped products, the underlying assets are owned by Old Mutual Life Assurance Company (South Africa) Limited who may elect to exercise any votes on these underlying assets independently of Old Mutual Investment Group. In respect of these products, no fees or charges will be deducted if the policy is terminated within the first 30 days. Returns on these products depend on the performance of the underlying assets. Old Mutual Investment Group has comprehensive crime and professional indemnity insurance. For more detail, as well as for information on how to contact us and on how to access information please visit www.omigsa.com.

More Related