BUSINESS NEWS - National Treasury has welcomed and noted the key risks identified and proposed policy recommendations by the International Monetary Fund (IMF) during a recent visit to the country.
The IMF visited South Africa from May 27 – 31 2019 and met with government, the South African Reserve Bank, state-owned enterprises (SOEs), business and academia to discuss economic developments in the country.
According to the Government News Agency, officials from the IMF travel to South Africa twice a year as part of their surveillance function.
However, it should be noted that the visit does not result in a board discussion or publishing of a report on South Africa’s economy.
In a statement issued after the visit, the IMF, in its main findings, found that South Africa’s growth outlook was dependent on the pace of implementation of structural reforms such as strengthening governance, encouraging competition, increasing labour market flexibility, and reducing the cost of doing business.
“South Africa’s fiscal deficit is set to worsen primarily due to South Africa’s growth outlook, which will put additional pressure on debt levels. A major risk to South Africa’s growth is the weak finances and operations of SOEs, especially Eskom,” read part of the statement.
The IMF also found that inflation has remained at or below the midpoint of the official target range and financial stability has been maintained.
National Treasury in a statement said the South African government was cognisant of this and work was underway to address them.
Since South Africa’s last IMF Article IV Consultation (May 28 – June 11 2018), steady progress has been made with regards to structural reforms.