Three economic pictures that paint a thousand words

For me, yesterday evening confirmed how a picture paints a thousand words. I was having my usual Sunday evening flip through Stanlib’s chief economist Kevin Lings graph-rich PDF which he distributes as a weekly economic review with the note that “we hope the charts are reasonably self-evident…” They always are.

Three from yesterday’s pack jumped at me. Most worrying for us here is the graphic showing foreign ownership of SA bonds, a key number given the capital-hungry economy’s dependence on offshore capital to fund its development. In June this key percentage fell for the fourth straight month to just over 30% – down from February’s 38%, itself a drop from the early 40s.

Next to make a big impression was the dramatic widening of the US Federal Budget Deficit. If SA’s widening deficit resembles (in Tito-speak) the opening of a hippo’s jaws, the US’s post-Covid-19 graph looks like a python trying to swallow a buffalo. For context, America’s deficit is $3trn – three times the worst point in the Global Financial Crisis aftermath.

Graph number three, which tracks UK retail sales, is sure to send shivers down spines of any executive at an old economy business. The outperformance in online sales growth, which had been slowing in the last two years, rocketed again due to Covid-19 – its three month moving average up 55% compared with total sales down 7%. The future has arrived. Believe it.

*Chapter One of the serialised audiobook of Anthony Butler’s superb biography on SA president Cyril Ramaphosa is now available for you. A new chapter will be published every Monday. Listen/download it here:

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