We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

South African Economy - Essay Example

Comments (0)
The South African central bank governor, Tito Mboweni, has hiked the interest rates when inflation is already high "to tighten monetary policy in an effort to stem rising inflation". 1 Since the cost of petrol is unceasingly increasing, it is creating additional pressure on food prices and adding to the current domestic inflation and bringing corresponding changes to the exchange rate, though the governor claimed that they were primary but not the only factors for the trend…
Download full paper
South African Economy
Read TextPreview

Extract of sample
South African Economy

Download file to see previous pages... 4Governor Tito Mboweni signaled repeatedly in the past month that lending rates were set to rise again as underlying inflation become "more generalized", while stricter lending rules had so far failed to dent robust consumer spending and credit demand. 5 For the current business cycle, however, the hikes that were made to the country's interest rates recently are generally being considered to be the last.
The causes of high inflation in South Africa primarily are two external causes; "The current price drivers are rising oil and international food prices, simply because demand outstrips supply in the international market for these products. The two are linked because the immediate effect of increased fuel prices is that it becomes more expensive to produce food, but this on its own does not necessarily lead to a general price rise." 6 Besides the policies of the South African government are not above contempt, and in fact these populist policies to appease some sections of the countrymen without concern or acknowledging the external causes in plunging the economy into despair. "Increased interest rates will have a direct effect on tax collections and therefore a direct effect on subsidizing the poor. This will lead to a rapid depletion of budget surplus, and to fill this gap the government has no option but to print money to fill in the gap." 7 This is leading South Africa towards hyperinflation.
Impact of high oil prices on South African economy
The high oil prices have severely affected oil importing countries like South Africa, whose capacity to generate electricity has been affected and which has "forced them to ration electricity". 8 Adding further, "The high price of oil impacts directly on firms, consumers and the government. First, it increases the domestic price of petroleum products, raises the cost of many immediate inputs, and as a result leads to higher production costs. Consequently firms may reduce their labor demand, investment and output. Second, as the short-run demand for oil is highly inelastic, consumers are forced to reduce their consumption of other goods and services to pay for higher energy bills." 9
Moreover, the rising oil prices will also affect South Africa's balance of payments, as exchange rates will work against them in international trade, this will reduce their level of economic activity since the amount of affordable oil that South Africa will be able to purchase shall be dramatically reduced under present conditions. "Consumers and firms could decide to reduce their oil consumption but since the demand for oil is highly inelastic in the short-term, they may be compelled to reduce their consumption of other imported goods. Doing so could undermine economic growth especially if capital goods imports are affected." 10.
Poverty is another issue facing the South African economy, since the current policy will lead to more widespread poverty as lack of adequate fuel will drive up the cost, with the cost of transportation of goods and ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
A South African Investment
To a certain degree, it may be correct that the possible utilitarian advantages of constructing the Caltex plant in the year of 1977, South Africa may have been significant than correct the ethical incorrect of Apartheid. And also at the same time that does not connote that Apartheid in any means, form, or appearance is ever correct or acceptable or permitted.
4 Pages(1000 words)Essay
Doing Business in the Midst of Cultural Change: South Africa: Specific Industry Analysis
Doing Business in the Midst of Cultural Change: South Africa: Specific Industry Analysis [Name] [Course] [Professor’s name] [Date] This paper attempts to analyze the industry in South Africa and in particular discussing the effects of the social change and global economy on that industry.
19 Pages(4750 words)Essay
Essay on International business in South Africa
Mahadevan describes Rapidly Developing Economies as nations with widespread industrialisation, stable currency, rule of law, capital controls, steady GDP growth (4% - 9% per annum on a consistent basis) and adequate technological infrastructure (2007). This paper will undertake the critique of one Emerging Economy, South Africa.
12 Pages(3000 words)Essay
WILDLIFE TOURISM IN SOUTH AFRICA – A Marketing Plan Outline The paper takes into account mainly two target groups the domestic and international wildlife tourists. The domestic tourists mainly the original dwellers of South Africa account for a major portion of wildlife tourism in taking tours encompassing both night and day stays.
12 Pages(3000 words)Essay
A South African Investment Paper
Justify your answer fully by identifying the possible benefits and the possible violations of rights and justice that you believe may be associated with the building of the plant, and explaining which you think are more important. The Interfaith Centre, which was involved in corporate responsibility in South Africa, believed that Texaco and SoCal, the American owners of Caltex, supported the South Africa’s apartheid system that legalized racism and deprived the blacks, human rights such as restriction from voting, collective bargaining, entitlement to low wages and living in segregated areas away from their families.
5 Pages(1250 words)Essay
A South African Investment
However, that does not imply that Apartheid in any form or structure is right, justified or tolerable. However, there is legitimacy to the actuality that the employment opportunities granted in the plant might have been among the most appropriate means accessible for the minorities as well as the blacks in South Africa obtain means of income.
5 Pages(1250 words)Essay
Is South African fiscal and monetary policy complementary
nations whose policies have changed drastically in the past ten years. Among the policies of this country, the ones that have experienced great changes are fiscal policy and monetary policy. According to Kashalala (2006), fiscal policies are actions and strategies designed by a country to foster economic growth through controlling the fiscal components of the economy.
9 Pages(2250 words)Essay
The African National Congress and the South African Communist Party
South Africa has a long history of the struggle for independence. The liberation struggle of South Africa as a country is very unique, compared to many other countries in the African continent that were colonized by the western powers, owing to the existence of the concept of apartheid, which was one of the most extreme nature of racism ideologies
6 Pages(1500 words)Essay
When this apartheid policy was viewed from philosophical sense, it seems that South Africa being a land of diverse population, each sections of the population
2 Pages(500 words)Essay
South African News Reports
The second week of Oscar Pistorius’s trial ended on Friday, 14th March. Defense counsel, Barry Roux, and his team poked holes in the prosecution’s credibility by revealing damning facts about police sloppiness during the murder investigations. It came to the fore that law enforcers had stolen two luxury watches from the scene of the crime.
3 Pages(750 words)Essay
Let us find you another Essay on topic South African Economy for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us