South Africa's macroeconomic resilience to external shocks: a comparison to its BRICS partners

Abstract

South Africa has to address the challenges of slow economic growth, poverty, and inequality in the face of precarious macroeconomic imbalances--foreign capital funds deficits of savings to investment, of tax income to government spending, and of exports to imports. Just how susceptible is the South African economy to an external shock? This paper extends a 'resilience indicator' developed by Rojas-Suarez (2015) and applies it to the case of South Africa. Such an indicator was constructed for South Africa and the other BRICS economies. The values for the period 2000-2014 were compared, and it was found that South Africa has become less resilient to an external shock during this period than its BRICS partners. South Africa is, therefore, more vulnerable to an external shock than the other BRICS economies.