Annualised growth

The growth rate of a given quarter compared with the previous quarter, compounded to an annual rate. See also Quarter-on-quarter growth rate.

Administered prices

Those prices set in accordance with government policy and not determined by market forces. An example is electricity tariffs.

Advanced economies

Industrialised countries with high GDP per capita, diversified exports, and close integration into the global financial system.

Austerity measures

Official actions taken by a government, during a period of adverse economic conditions, to among other things reduce its budget deficit using a combination of spending cuts or tax increases.

Asset price bubble

When prices/valuations for a category of assets rise materially above the level justified by economic fundamentals.

Balance of payments (BoP)

An accounting sheet, summarizing all the transactions between the residents of a country and the rest of the world. It consists of the current account (exports and imports etc.), the financial account (investment and borrowing etc.) and the reserves account (changes in foreign exchange and gold reserves). See also Current account, Financial account and Foreign reserves.

Basel III

Latest phase of reforms developed by the Basel Committee on Banking Supervision to strengthen the regulation, supervision and risk management of the banking sector.

Basis point

One hundredth of one per cent.


Any interest-bearing government or corporate security that requires that the issuer will pay the holder of the bond a specified sum of money, usually at fixed intervals, and will repay the principal amount of the loan at maturity. See also Bond yield.

Bond yield

The interest received from a security which is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value. See also Yield.

Bracket creep

Increased real tax liability that arises when the personal income tax tables are not fully adjusted for inflation.

Budget deficit

A budget deficit indicates the extent to which government expenditure exceeds government revenue. This deficit is usually expressed as a percentage of GDP at current prices.

Business cycle

Phases in which an economy grows (upswing) or decelerates/contracts (downswing) relative to its long-term trend. See also Coincident indicator and Leading indicator.

Capital adequacy

A measure of a financial institutionÂ’s capital, expressed as percentage of its credit exposure.

Coincident indicator

An economic indicator (such as real retail sales) whose turning points coincide with those of the business cycle (called reference turning points).

Constant prices (i.e. Real)

The monetary value of an indicator after the impact of inflation has been accounted for. It will be expressed in terms of the currency value of a specific year, called the base year (e.g. 2005). This price-format reflects the volume changes at a specific time.

Contingent liability

A government obligation, such as a guarantee, that will only result in expenditure if a specific event occurs. See also Government guarantee.

Core inflation

In theory this refers to underlying inflation. There are various practical measures of core inflation. The officially used measure is the CPI excluding food, non-alcoholic beverages, petrol and electricity prices.

Consumer price index (CPI)

The index from which consumer inflation is calculated. The prices of a representative basket of goods and services, which is typical of the median consumer, is tracked over time to monitor the purchasing power of the consumerÂ’s money. See also Index.

Contractionary economic policy

Monetary (for example increasing the policy interest rate) and/or fiscal (for example spending cuts and/or tax increases) policy measures to dampen economic growth for fear of an overheating economy. See also Monetary policy and Fiscal policy.

Credit rating

An indicator of the risk of default by a borrower or the riskiness of a financial instrument. Investments rated as high risk are considered sub-investment grade (or “junk”).Current account

The accounting sheet displaying the difference between exports and imports, not only of goods but also of services (e.g. tourism) and income (interest and dividends). It indicates a countryÂ’s net earnings from the re st of the world. See also Trade balance.

Current prices (i.e. Nominal)

The monetary value of an indicator before any adjustment for inflation. This price-format reflects the actual value of an indicator at a specific time as it would be recorded by accountants.


A price index used to convert a current price variable into constant prices, or vice versa.

Disposable income

Total household income from all sources (i.e. wages, transfers and property income) minus taxes.

Durable goods

Motor vehicles or other transport equipment, furniture, appliances and electronic equipment, jewellery etc.

Economically active population

The part of the population that is of working age and is either employed or seeking work.

Emerging markets

Emerging markets are countries with low to middle income per capita. They are advancing rapidly and are integrated with global (product and capital) markets.

Eurozone vs. European Union

The Eurozone is an economic and monetary union of 19 European Union (EU) member states that have adopted the euro as their common currency and sole legal tender. The European Union is an economic and political union of 27 member states (the 19 Eurozone states plus 8 others) which are located in Europe. The UK left the EU at the end of 31 January 2020.

FNB/BER Consumer Confidence Index

A survey of households in metropolitan areas, cities, towns and villages. The survey is made from personal at-home interviews and assesses general economic outlook, householdÂ’s financial situation and willingness t buy durable goods. The indicator varies on a scale of -100 to 100; a value of -100 indicates extreme lack of confidence, 0 neutrality and 100 extreme confidence.

Financial account

The accounting sheet displaying the net change in capital flows. Includes foreign direct investment as well as portfolio and other investment flows.

Fiscal policy

Government’s use of its revenue (taxes) and expenditure with the aim of affecting the economy.

Foreign reserves

Assets held by the central bank in the form of foreign bank notes, deposits in foreign banks and other claims which can be converted into foreign deposits. Added to this are the special drawing rights (SDRs) and deposits at the IMF.

Government guarantee

An assurance made by government to a lender that a financial obligation will be honoured, even if the borrowing government entity is unable to repay the debt. See also Contingent liability.

Gross domestic expenditure (GDE)

The total value of spending originating within the borders of a country. The GDE excludes exports and includes imports.

Gross domestic fixed investment (GDFI)

The value of accruing additional capital stock within the borders of a country, not providing for depreciation in the current capital stock.

Gross domestic product (GDP)

The total value of all final goods and services produced within the geographic boundaries of a country in a particular period. Economic growth is calculated as the growth in GDP.

Gross value added

The value of output less the value of intermediate consumption; it is a measure of the contribution to GDP made by an individual producer, industry or sector. See also Net value added.

Household consumption expenditure

Expenditure by households on final goods and services. This component is the largest expenditure category in the domestic economy.


A series of index numbers at regular fixed intervals, which compare the level of an indicator with its own level at another time or place. The base period (e.g. 2005) will be set to 100 and all other periods will be expressed as a ratio of that.

Leading indicator

An economic indicator (such as the number of new cars sold) whose turning points precede those of the business cycle (called reference turning points).


An entity is highly leveraged when it has a large amount of outstanding debt which was borrowed to buy assets or fund expenses. Deleveraging is the process of settling this debt, at least partially.


The broadest indicator of money supply in a country. It includes notes and coins, all positive balances and deposits (over all terms) in all domestic private sector bank accounts.


This deals with the whole economy – including issues such as growth inflation, unemployment and the balance of payments.

Macroprudential regulation

Rules that protect the stability of the financial sector and guard against systemic risk.

Medium-Term Budget Policy Statement (MTBPS)

Provides rolling three-year estimates for government expenditure and revenue. It sets out the policy framework for the main Budget that is tabled to Parliament in February of each year.


This deals with the behaviour of individual firms, consumers and sectors.

Monetary policy

Actions taken by monetary authorities (usually central banks) to influence the rate of interest or the quantity of money with the aim of achieving price stability and/or affecting the economy.

Monetary policy normalisation

The process of adjusting the economyÂ’s policy interest rate towards its real neutral level. In the current environment, it refers to the reversing of unusually accommodative monetary policies.

Monetary Policy Committee (MPC)

Committee within the South African Reserve Bank (SARB) tasked with the implementation of monetary policy. The mandate of the MPC is to keep inflation as measured by the CPI between 3% and 6%. This committee has independence with respect to decisions (mainly in terms of the policy interest rate – i.e. th repo rate) to achieve this mandate. See also Repo rate.

Month-on-month growth rate

The growth rate of a given month compared with the previous month.

National accounts

The comprehensive accounting framework within which economic data is compiled. Provides a coherent, consistent and integrated set of macroeconomic accounts and balance sheets.

Negotiable certificate of deposit (NCD)

Short-term deposit instruments issued by banks, at a variable interest rate, for a fixed period.

Net balance/Net majority

The net balance statistic is calculated by subtracting the percentage of respondents replying that a specific indicator has deteriorated/declined compared to a year ago, from the percentage replying that the same indicator has improved/increased compared to a year ago. This percentage is then referred to as the net majority.

Net exports

Exports less imports.

Net value added

The value of output less the values of both intermediate consumption and consumption of fixed capital (depreciation). See also Gross value added.

Nominal effective exchange rate

It reflects movements in the external value of the rand against a basket of currencies of the countryÂ’s main trading partners.

Nominal wage rate

Indication of the increase in nominal remuneration per worker. Measured as the percentage change in the aggregate wage bill divided by the number of workers in the economy.

Non-durable goods

Food and beverages, fuel, electricity, pharmaceuticals etc.


Goods and services produced and consumed in the local economy. These are not imported or exported and are not close substitutes for goods and services which are traded.

Output gap

Measures the difference between actual and potential GDP. The output gap is negative when actual GDP is below potential GDP. See also Potential GDP.

Potential GDP

The level of output that an economy can produce at a constant inflation rate. Although an economy can temporarily produce more than its potential level of output, that comes at the cost of rising inflation. Potential output depends on productivity (which includes the effects of technological advances and other innovations), the capital stock, the potential labour force (which depends on demographic factors and on participation rates) and the natural rate of unemployment.

Prime rate

Benchmark rate of banks for longer-term lending. Since 2002, the prime rate charged by banks has been at a margin of 350 basis points above the repo rate. See also Repo rate.

Producer price index (PPI)

The headline PPI measures price changes in a basket of final manufactured goods. There are however also other PPIs, each aimed at monitoring price changes at the various stages of production. These PPIs constitute a basket of intermediate goods priced when they leave local farms, mines and factories. There are also PPIs measuring price changes in exported and imported commodities.


The amount of output in terms of goods and services relative to the resources utilised (usually labour and capital).


This index tracks manufacturing sector activity and is compiled in line with the international norm – by weighing major components such as busines activity, new sales orders, inventories, suppliers’ performance and employm ent. A reading above 50 index points signals expansion.

Purchasing power parity (PPP)

An indication of the adjustment needed to equate the purchasing power of money across borders. For example, how many units of rand are needed to buy the same as what can be purchased with one US dollar.

Quantitative easing (QE)

The injection of liquidity into the economy via the purchase of assets on the open market by a countryÂ’s central bank.

Quarter-on-quarter growth rate

The growth rate of a given quarter compared with the previous quarter.

Rating agency

A company that evaluates the ability and willingness of countries or other borrowers to honour their debt obligations. Credit ratings are used by international investors as indications of, for example, sovereign risk. See also Credit rating.

Real effective exchange rate

It is the nominal effective exchange rate adjusted for the inflation differential between South Africa and its major trading partner countries. See also Nominal effective exchange rate.

Real wage rate

Indication of the real i.e. inflation adjusted increase in remuneration per worker. See also Nominal wage rate.


A period in which national output, income and spending declines. In SA, a recession is technically defined as two consecutive quarters of negative growth.

Repo rate

The repurchase (repo) rate is a fixed policy interest rate determined by the MPC. The repo rate forms the basis of private sector deposit and lending rates, because this is the rate at which the SARB provides liquidity for the banking sector.

Risk premium

A return that compensates for uncertainty.

RMB/BER Business Confidence Index

An index that tracks the percentage of respondents in manufacturing, building, retail, wholesale and motor trade rating economic conditions to be satisfactory during a given period. It is measured on a scale from 0 to 100, where 50 indicates a neutral level. Mostly used as a business cycle indicator.


The fluctuation in a time series due to seasonal factors such as holidays, tax year-ends, agricultural crops etc. This fluctuation tends to repeat itself in regular cycles (usually the months of a year).

Seasonally adjusted (s.a.)

The seasonal fluctuation within a time series has been eliminated. This makes it possible to compare two consecutive periods (months or quarters in most cases) on equal foot.

Semi-durable goods

Clothing and footwear, textiles, glassware, spare parts etc.


The combination of low or slowing economic growth and rising prices i.e. inflation.

Stimulatory economic policy

Monetary (for example cutting the policy interest rate) and/or fiscal (for example increased spending cuts and/or tax cuts) policy measures to spur economic growth. See also Monetary policy and Fiscal policy.

Structural reforms

Reforms necessary to alleviate constraints to economic growth and increase a countryÂ’s potential growth rate.

Terms of trade

The ratio between a countryÂ’s export and import prices. The terms o trade of a country improves when export prices increase at a faster pace than import prices.

Trade balance

The difference between the exports and imports of a country, limited to goods only.

Unit labour cost

The labour cost to produce one 'unit' of output. This is calculated as the total wages and salaries divided by real GDP.

Unsecured credit

Any type of debt or general obligation that is not collateralised by a specific asset of the borrower. The lender normally carries a larger risk with this type of credit, resulting in a higher interest rate charged than in the case of conventional asset-backed credit.

Year-on-year growth rate

The growth rate of a given period (for example, month or quarter) compared with the same period in the previous year.


The interest or dividends received from an asset. Usually expressed annually as a percentage based on the investment's cost, its current market value or its face value.