TRALAC - Trade Law Centre

Country Info: South Africa

Economic Background

South Africa is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors and a stock exchange that is the 15th largest in the world. Even though the country possesses modern infrastructure that support a relatively efficient distribution of goods to major urban centers throughout the region, some components retard growth.

The economy began to slow in the second half of 2007 due to an electricity crisis. State power supplier Eskom encountered problems with aging plants and meeting electricity demand necessitating "load-shedding" cuts in 2007 and 2008 to residents and businesses in the major cities. Subsequently, the global financial crisis reduced commodity prices and world demand.

GDP fell nearly 2% in 2009 but has recovered since then. Unemployment, poverty, and inequality remain a challenge, with official unemployment at nearly 25% of the work force.

State power supplier Eskom has built two new power stations and installed new power demand management programs to improve power grid reliability.

South Africa's economic policy has focused on controlling inflation, however, the country has had significant budget deficits that restrict its ability to deal with pressing economic problems. The current government faces growing pressure from special interest groups to use state-owned enterprises to deliver basic services to low-income areas and to increase job growth. (Source: World Factbook, 2013)

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