This headline sounds incredible! It makes you feel like we're ballers & shot callers! We're not! Here's why 66% GDP growth is FAR LESS impressive than it actually sounds [Thread]
https://twitter.com/lingskevin/status/1336242754620428288
1. Base effects make it look good
(doesn't refer to big booty huns)
Q2 2020 GDP DOWN 51.7%
Q3 2020 GDP UP 66.1%
What's a base effect?
If a Birkin is $100k & goes on sale at 50% it's now $50k. Then the price shoots up by 70%, it's now $85k (still $15k lower)
Math not meth!
(doesn't refer to big booty huns)
Q2 2020 GDP DOWN 51.7%
Q3 2020 GDP UP 66.1%
What's a base effect?
If a Birkin is $100k & goes on sale at 50% it's now $50k. Then the price shoots up by 70%, it's now $85k (still $15k lower)
Math not meth!
2. Bigger isn't always better....
66.1% is an annualized figure. This assumes SA will grow at the same pace for 4 straight quarters. If you don't annualize, SA grew 13.5% from the previous quarter.
If you think annualizing is daft - StatsSA also agree. This could change soon.
66.1% is an annualized figure. This assumes SA will grow at the same pace for 4 straight quarters. If you don't annualize, SA grew 13.5% from the previous quarter.
If you think annualizing is daft - StatsSA also agree. This could change soon.
3. Comparisons are misleading
Are we actually better off than last year?
No, we're worse off. GDP shrank by 6% compared to the same period last year.
Are we actually better off than last year?
No, we're worse off. GDP shrank by 6% compared to the same period last year.
4. How long will it take us to get back to pre-COVID levels?
Many analysts feel it could take a few years for us to get back to these levels (up to 5 years). In short - our problems are highly unlikely to ever get fixed in a single quarter.
Many analysts feel it could take a few years for us to get back to these levels (up to 5 years). In short - our problems are highly unlikely to ever get fixed in a single quarter.
5. But the ZAR is getting stronger?!
If you come across a politician proudly boasting about Rand strength & taking full credit - feel free to jump them
A massive driver of ZAR strength is relentless Fed stimulus & a shift towards broader inflows into emerging markets (risk-on)
If you come across a politician proudly boasting about Rand strength & taking full credit - feel free to jump them
A massive driver of ZAR strength is relentless Fed stimulus & a shift towards broader inflows into emerging markets (risk-on)
6. Okay, GDP stats are fucked, how do you know whether SA is healthy?
Unemployment is at the worst level in 17 years. That's over 30% (narrow definition) & over 40% (broad definition)
Overlay our massive debt problems, dysfunctional SOEs & absent governance - it's bleak.
Unemployment is at the worst level in 17 years. That's over 30% (narrow definition) & over 40% (broad definition)
Overlay our massive debt problems, dysfunctional SOEs & absent governance - it's bleak.
Additional reading:
1. SA GDP far from pre-COVID levels even as recession ends (@business)
bloomberg.com/news/articles/…
2. South Africa Statistics Agency May Drop Focus on Annualized GDP (@business)
bloombergquint.com/onweb/south-af….
1. SA GDP far from pre-COVID levels even as recession ends (@business)
bloomberg.com/news/articles/…
2. South Africa Statistics Agency May Drop Focus on Annualized GDP (@business)
bloombergquint.com/onweb/south-af….
Shout-out for making it to the end. I appreciate you! For more stimulus check out my OnlyFans.
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