MTBPS: The average South African is only 1.3 times richer than 25 years ago
CAPE TOWN – The International Monetary Fund (IMF) estimates that trade tensions and the Brexit uncertainty may take away 0.8 percentage points from global growth after a decade‐long economic expansion.
This was revealed by Finanance Minister Tito Mboweni when delivering his Medium-term Budget Policy Statement (MTBPS) in Parliament on Wednesday, where he also stated that growth in advanced economies was expected to slow.
Mboweni said economic growth in China and India was expected to slow to 6.1 percent this year. Growth in both these countries accelerated after far‐reaching structural reforms.
“The average Chinese person is seven times richer today than twenty‐five years ago. The average Indian person has become three and a half times richer over the same period.
“Meanwhile, the average South African is only 1.3 times richer,” said Mboweni.
The Finance Minister said growth in emerging markets was lower partly because of the global slowdown, but also due to policy missteps, which we should avoid. Economic growth in Mexico is down sharply. Its own state‐owned energy company, PEMEX, will cost about $2.6 billion (R38 billion) a year to fix.
The Brazilian economy will most likely grow at 0.9 per cent in 2019. There, the state‐owned energy company, PETROBAS, has its own problems.
According to Mboweni things are much better closer to home: “The African continent has a young, growing, entrepreneurial population. Sub‐Saharan Africa is expected to grow by 3.6 per cent next year, the second‐fastest growing region after Asia excluding Japan.
“Just like Eliud Kipchoge, the Kenyan economy is racing ahead. Growth is expected to be 6 per cent next year. In Ghana, after extremely difficultstructural reforms, growth is expected to be 7.5 per cent this year and 5.6 per cent next year. Ethiopia will grow by over 7 per cent. They clearly have new shoes. Why don’t we?”