The South Reserve Bank (SARB) has been developing an integrated economic accounts (IEA) statistical framework for the South African economy since 2015. These macroeconomic statistics will address some of the data gaps identified by the Group of Twenty (G20)3 Data Gaps Initiatives (DGI). This note illustrates progress made with the balance sheet (non-financial assets and financial assets and liabilities) as well as the accumulation accounts – as represented by the shaded areas in Figure 1.
The largest sector in the South African economy – the finance, insurance, real estate and business services sector – contributed 20.2% to nominal output in 2016 and 29.4% to the output of the tertiary sector. In 2016, the latter contributed 68.6% to the nominal gross domestic product (GDP) while the finance and insurance subsector accounted for just less than half
of the nominal output of finance, insurance, real estate and business services. Commercial banks contributed most to the output of the finance and insurance subsector, with financial intermediation services indirectly measured (FISIM)2 constituting the largest portion of the total output of commercial banks. This note analyses the recent changes in real output and the relative contribution of the finance, insurance, real estate and business services sector to real output in the South African economy. It also describes the methodology applied to measure the output of commercial banks.
This note analyses the recent changes in real output and the relative contribution of the finance, insurance, real estate and business services sector to real output in the South African economy. It also describes the methodology applied to measure the output of commercial banks.
The nominal value of financial flows in the South African economy declined in 2016, in step with weak gross domestic product (GDP) and income growth, tight credit conditions and subdued business and consumer confidence. Inflows from the foreign sector also decreased in 2016. A decline in equity inflows reflected the effect of generally accommodative global monetary policy in advanced economies whereas the concomitant search for yield supported inflows in the bond market. These inflows were sufficient to offset the overall domestic saving investment gap. This note presents a brief overview of trends in the 2016 flow of funds, captured through real and financial transactions amongst all institutional sectors. The quarterly flow of funds accounts are appended to this note and the annual summary appears on pages S–46 to S–47 of this issue of the Quarterly Bulletin.
The 2008 global financial crisis and the adverse economic conditions in its wake, which are still felt today, illustrate the extent of integration between real economic activity and financial markets, both within an economy and among countries. Although significant bodies of economic and financial statistics existed at the time, there were crucial areas that were poorly covered. The limited availability and comparability of time series data across countries compounded the problem, making it difficult to track the interconnectedness of global economic and financial activity. On a global scale, economic agents have financial positions with each other which create a link for contagion, contingent upon the structure of national institutional sector balance sheets and concomitant exposures. This is further exacerbated by the existence of complex financial instruments both on and off balance sheet which create serious financial stability risks. The scarcity or non-existence of data on the network of domestic and international financial positions contributes significantly to inherent economic and financial stability risks.