South Africa is a BRICS country. Among the five BRICS countries, China, India, Brazil, Russia, and South Africa. Today we will talk about South Africa among the BRICS countries, because their economy has been in trouble recently!
Speaking of South Africa, the most impressive thing is gold and diamonds. South Africa’s gold and diamond production ranks first in the world! South Africa is the second largest economy in Africa, and minerals are the main source of South Africa's economy. Mining, manufacturing, agriculture and service industries are the four pillars of the economy, and deep mine mining and other technologies are world leaders. It is worth mentioning that China is South Africa's largest trading partner, and South Africa is China's largest trading partner in Africa.
Whose currency is the best in 2016? It is the South African Rand. In 2016, the South African Rand appreciated against the major currencies, whether it was the US dollar, the Euro, the British pound or the Australian dollar, throughout the year. was undoubtedly one of the best-performing currencies in the world in 2016. Unfortunately, the good times for did not last long. Just four months into 2017, Standard & Poor's (on April 3) lowered South Africa's credit rating by one notch to BB+, the highest level of junk, and set the rating outlook as negative ( It’s not a big deal for Western capitalist countries to watch the excitement!) The South African currency rand fell by more than 2%. So why does this happen?
A fire broke out at the city gate, affecting the economic fish pond
Speaking of South Africa’s current experience, we need to talk about the relationship between the South African authorities and the economy. In the past few years in South Africa, the impact of currency exchange rates has been mainly controlled by the president, the minister of finance, and the functions of the central bank. Being weakened, and its Finance Minister Gordhan are well-known in the financial world, and this is where the story begins! Since the currency exchange rate is controlled by the Finance Minister and the President, once there are personnel changes in these two positions, the exchange rate will naturally be affected. The South African economy is directly affected by changes in the currency exchange rate!
personnel changes are coming! South Africa announced the reorganization of the cabinet in the early morning of March 31 and replaced Finance Minister Gordhan. This uncertainty has directly affected investor choices. Since the announcement, the South African currency Rand has depreciated by 11.37%. South Africa's economy has recovered in recent years. Weak, South Africa is facing its lowest growth rate since the 2009 recession, while the unemployment rate is as high as 27%.
South Africa's economic growth rate was 0.3% last year. What is worrying is that its economy shrank in the fourth quarter of last year. However, The International Monetary Fund predicted at the beginning of this year that South Africa's economic growth rate will increase to 0.8% this year. Perhaps the IMF did not account for the impact of South Africa’s uncertain authorities this year! Judging from the current economic status of South Africa, the uncertainty of the authorities has affected the economic growth prospects! The important thing is that South Africa will hold a general election this year, and it is unknown who will take the throne by then. The current situation has already harmed the driving force for sustained economic development.
Standard & Poor's said in a statement: "The downgrade of this rating is because we believe that the African National Congress (Editor's note; South Africa's African National Congress (ANC) is now South Africa's ruling party, referred to as "ANC") The change in the leadership of the government cabinet may cause divisions. The change of finance minister has brought risks to the coherence of policies. The possibility of negative effects on economic growth and fiscal spending has increased. "
Rating agencies in Western countries. Standard & Poor's, Moody's , Fitch , are not optimistic about the impact of the current authorities' actions in South Africa on the economy. Standard & Poor's has issued a negative rating. This negative rating has affected South Africa's economy. It is true. A master of gaming in the capital world!
This makes people think that stability is paramount! Only in a peaceful and stable environment can the economy continue to develop. Once there is any trouble, it is easy to be targeted by countries with ill intentions! You know
