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IMF lowers SA’s economic growth forecasts

Urges reforms to improve policy certainty and the efficiency of state-owned companies.

The International Monetary Fund on Tuesday cut South Africa’s economic growth forecasts for this year and next, as it urged implementation of reforms to improve policy certainty and the efficiency of state-owned companies.

Having stagnated for a decade, Africa’s most industrialised economy slipped further in the second quarter by entering recession for the first time since 2009. In response, President Cyril Ramaphosa announced a plan to shift government expenditure and launch an infrastructure fund.

The IMF now expects South Africa’s economy to expand 0.8%, down from a forecast of 1.5% in July. It is expected to grow 1.4% in 2019, down from a previous estimate of 1.7%, the Fund said in its latest World Economic Outlook report.

“Recent reforms in South Africa, such as measures adopted to tackle corruption, to strengthen procurement, and in the intention to eliminate wasteful expenditure, are welcome,” the IMF said.

“However, further reforms are needed to increase policy certainty, improve the efficiency of state-owned enterprises, enhance flexibility in the labor market, improve basic education, and align training with business needs.” 

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Same story every year, at the beginning of the year an optimistic forecast and every few months it gets reduced a bit. In my opinion the biggest wasteful expenditure is AA and BEE, you have to pay more for goods and services to support empowerment and employ people who are not the best for the job.

Indeed. The pattern suggests that we may safely assume a (-n optimistic) growth rate of around 0.7 – 0.8% for 2019. This economy is barely registering a pulse. The very necessary reforms are most unlikely. The ANC govt is firmly hogtied by bankrupt ideology and a pervasive lack of ability.I fear that they have run out of time.

Also, any growth below 1.5%, which is the population growth, means negative per capita GDP growth.

Poor leadership is the achilles heel of SA and most of Africa .Maintaining the comfort zones of non performing teachers , keeping labour rules strict to protect labour at all times , BEE systems promoting only skin colour as a qualifying factor for state assistance , providing free tertiary education instead of free artisan training for the masses , are only some of the failed ideologies that prevent higher economic growth rates in SA .
It is time for Ramaphosa to call a spade a spade , and tell the citizens of our land to stop dreaming and hoping for miracles , or a hidden pot of gold , and instead to accept that in the real world , all are equal , and in an economy you will only be judged and rewarded on your contribution , and nothing else…so get to work .

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