Economy of South Africa

South Africa is a middle-income, emerging market country with great development potential. It is the economic powerhouse of Africa - South Africa's GDP alone is a full quarter of that of the entire African continent.

A pragmatic but fiscally conservative economic policy has brought South Africa's budget deficit down from 5.1% of GDP in 1994 to 1.6% of GDP in the first quarter of 2005. Annual GDP growth averaged 3.5% from September 1999 until June 2005 (it was 4.3% in 2005), and economic growth shows no signs of stopping.

South Africa has an abundant supply of natural resources and well-developed financial, legal, energy, transport and communications sectors (though South Africans countrywide rue Telkom's monopoly on landline telecommunications). The Johannesburg Stock Exchange ranks among the ten largest in the world.

Unfortunately, growth has not been sufficient to dent South Africa's very high unemployment rate or the stark poverty experienced in the country's rural areas. Daunting economic challenges remain: South Africa has very high economic inequality, the highest incidence of HIV/AIDS infection in the world, and unacceptably high rates of crime and corruption.

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