Download World`s 20 Largest Economies in 2030

March/April
2015
O N T RACK I NSIGHT
World Economies: The 2030 projections
According to the International Monetary Fund (IMF), the United States is the current leader as the world’s largest
economy at a GDP of around $18.4 trillion and in second place is China with a GDP of around $10.9 trillion for
2015. The 2030 projections made by the US Department of Agriculture (USDA) does however show some
significant changes in the dynamics of world’s largest economies.
World's 20 Largest Economies in 2030
United States
China
India
Japan
Germany
Brazil
United Kingdom
France
Canada
Russia
Italy
Mexico
Indonesia
Australia
South Korea
Spain
Turkey
Saudi Arabia
Nigeria
Netherlands
$24.82
$22.17
$6.59
$6.42
$4.54
$3.95
$3.62
$3.33
$2.57
$2.43
$2.34
$2.28
$2.07
$1.94
$1.94
$1.77
$1.62
$1.27
$1.05
$1.01
Source: US Department Of Agriculture
The 2030 data projections indicate that the US will still claim its number one spot but it will have far less
dominance as China’s GDP grows to $22.2 trillion which is just behind the $24.8 trillion of the United States. This
is counter intuitive when China’s growth is the slowest it has been in six years but stimulatory measures are being
implemented to support the economy.
The estimates by the USDA indicate that several other emerging markets will move up in ranking as their
economies grow more than those of some developed markets. Emerging economies like India will move from a
ranking of 8 to a ranking of 3 with projections that they will have the largest and youngest workforce in the world
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by 2030. South Africa also moves up in rank from 28 to 23 in the year 2030 despite the current instability that the
country is experiencing.
Some developed countries like Japan and Germany will however see little growth over the next few years, moving
them one rank lower over the next 15 years.
Although these figures have some very unpredictable elements they do provide some insights into what the
world’s economies could look like in 2030.
Inflation: An unavoidable increase
After 6 months of decreases in the consumer price index, Stats SA announced an increase of 0.1 of a percentage
point which relates to a 4.0% year-on-year rate.
Education was the biggest contributor and alcoholic beverages and tobacco also contributed more due to an
escalation in sin taxes. The transport inflation index indicated a 3.1% increase which was mostly due to the recent
rise in fuel prices. All other inflation indexes showed increases as well and it is expected that food inflation, which
experienced a relatively small rise of 0.8% in March, will have a greater impact on inflation in coming months.
Luckily inflation is still within the 3%-6% target band but together with slow economic growth, it will be another
year of careful decision making by the SA Reserve Bank.
E CONOMIC DATA
CPI: March
4.0%
PPI: February
2.60%
Unemployment Q4
24.3%
Repo Rate
5.75%
Prime rate
9.25%
GDP (Q4 14)
4.1% q/q
Source: Stats SA, SARB
STOCK OF THE MONTH
RMI Holdings is an investment company that has a portfolio with some of SA’s most prominent insurance groups.
These insurance groups include Discovery Holdings (25%), MMI Holdings (25%), OUTsurance (83%), and RMB
Structured Insurance (76%).
RMI has been an outperformer in its sector since listing in 2011 and has even compared well with players such as
Sanlam and Old mutual. Of the R3bn that RMI derived from its investments, OUTsurance has contributed about
R1.2bn. This is expected to continue as OUTsurance is expanding through Youi, its offshore business, which now
operates in Australia and New Zealand.
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RMI’s CEO, Herman Bosman, has indicated that RMI wants to expand the current portfolio through entering the
asset management space to create another outstanding business like OUTsurance and Discovery. In order to
achieve this they have hired Chris Meyer, former CEO of RMB Morgan Stanley, who wants to invest in boutique
businesses and create an in-house platform. The diversification into other financial services should enable RMI to
continue its path of good performance.
RMI HOLDINGS
2011/12/08
2012/01/16
2012/02/16
2012/03/20
2012/04/25
2012/05/30
2012/07/02
2012/08/02
2012/09/05
2012/10/09
2012/11/09
2012/12/12
2013/01/18
2013/02/20
2013/03/26
2013/04/30
2013/06/03
2013/07/05
2013/08/07
2013/09/10
2013/10/14
2013/11/14
2013/12/18
2014/01/23
2014/02/25
2014/03/31
2014/05/08
2014/06/10
2014/07/14
2014/08/14
2014/09/16
2014/10/20
2014/11/20
2014/12/24
2015/01/29
2015/03/03
2015/04/07
5500
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
Source: INetBFA
F UND C OMMENTARY
True North IP Flexible Equity Fund
The fund climbed 4.34% from 1 February to the end of March while the JSE All Share index increased by 1.53 % during
these two months. Currently the fund is 89.39% invested in equities of which 14.90 % is invested in small cap stocks
and 18.81% invested in direct offshore stocks. The fund continues to ho ld cash and short dated bonds to lower
volatility and risk. Limited exposure to resources still weighs on performance but should pay off over the long term.
True North IP Enhanced Property Fund
The property fund has risen 3.73% for the two month period fro m February to the end of March while the SA listed
property index produced 6.88% during a very buoyant property market . The property fund is invested in 45.67%
listed property counters and 36.14% in sub funds, one of which focuses on global property market s. Of the equities,
21.37% is invested in smaller cap property stocks and there is indirect offshore exposure of 20.58% through mainly
the Global Catalyst Property Fund .
The fund has done excepti onally well since its launch in November 2014 and offers investors a solid position in
property as an asset class with growth prospects (as opposed to an income objective) and a built -in currency hedge
through its offshore holdings.
For more details on holdings and performances, please view the fact sheet s which can be downloaded from our
website: www.tncm.co.za.
Disclaimer This document is for information purposes only and is not intended for the solicitation of new business. True North Capital
Management shall not accept any liability or responsibility of whatsoever nature and however arising in respect of any claim, damage,
loss or expense relating to or arising out of or in connection with the reliance by anyone on the contents of this document.
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