World Economy

S. Africa Faces Tough Year

S. Africa Faces Tough Year  S. Africa Faces Tough Year

Economists predict that this year will continue to be a tough one for South Africans with the country ranked as the third most miserable nation economically in the world.

Bloomberg rates Venezuela as the most miserable economy, followed by Argentina and then South Africa.

Data from 63 countries was compared to draw up the report, which included a look at the unemployment rate and inflation.

Nedbank senior economist, Nicky Weimar said to add to the depressing economic environment the country is in, the unemployment rate is also making South Africans feel more miserable.

“With China slowing and commodity prices on a deep slump, there’s a lot of pressure on our mining and manufacturing sector and even those who are employed are probably thinking to themselves ‘I wonder how secure my job is’,” Weimar said.

But Standard Bank’s chief economist, Goolam Ballim seems to believe there is hope to get out of this misery. “Later this year will show not quite joy but I sense that there will be vibrations.”

Economists say the drought has worsened the country’s economic outlook, slowing down growth and increasing inflation.

Global oversupply and a drop in coal prices to 7-year lows have hit miners and coal exporting countries hard. Indonesian coal exports fell 50 million tons in 2015 due to the market glut and Chinese slowdown.

A drop in Indonesian exports to India, which imported around 165 million tons of thermal coal in 2015, offers an opportunity for South Africa, analysts said.

Exports last year were helped by improved transport logistics moving coal to Richards Bay Coal Terminal, one of the leading coal export terminals in the world, while lower freight prices for global seaborne coal also aided South African producers to compete for “price-sensitive” Indian buyers, analysts said.