The economic powerhouse of the continent, South Africa produces one fifth of its entire production. The gross domestic product (GDP) is four times that of its southern African neighbors and covering around 25% of the entire continent's GDP. Following the expansion of the global economy, South Africa is acquainted with a real growth rate of GDP of 5%, in 2006 (SARB, 2007: S-148). South Africa's economy has been in an upward phase of the business cycle since September 1999 - the longest period of economic expansion in the country's recorded history. As Mohr (2005: 63) defines, the business cycle refers to the fluctuations in the overall level or pace of economic activity. It is the pattern of expansion (recovery) and contraction (recession) in economic activity relative to its long-term trend. After analyzing the current state of the business cycle in South Africa, it is relevant to study its prospects.
[...] Burger, P. 2007.The real sector and the monetary sector. Business Conditions Analysis: MMB 720. University of the Free State, Bloemfontein, South Africa, 1st August 2007. Du Plessis, S.A “Stretching the South African business cycle” [online] Available from: http://www.sciencedirect.com/science [10th October 2007]. Du Plessis, S.A “Reconsidering the business cycle and stabilisation policies in South Africa” [online] Available from: http://www.sciencedirect.com/science [10th October 2007]. Fourie, F.C.v N How to think and reason in macroeconomics. 2nd edn. Lansdowne: Juta Fourie, F.C. v N. & [...]
[...] The Business Confidence Index (BCI) compiled by the South African Chamber of Business (SACOB). According to Mohr (2005: this monthly indicator is a “composite index that tracks the performance of 13 key economic indicators which have been judged by business to have the greatest bearing on the business mood.” The SACOB Business Confidence Index: 07 02/07 03/ 07 04/ 07 05/ 07 06/ 07 07/ 09 08/ The BCI bounced back to 98.7 in September 2007 from the August 2007 level of 98.1 the lowest BCI of the year. [...]
[...] In order to analyse the current state of the South African business cycle, we can also use two main indicators in the real sector: consumption and investment (Burger, 2007). These variables have direct consequences on the growth of income and GDP because Y = C + I + G + M). Consumption: Both final consumption expenditure by households ( R million in 2006) and final consumption expenditure by general government ( R million in 2006) have increased significantly since 1999, supported by rising level of employment and disposable income (SARB, 2007: S-104). [...]
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