IMF boss calls for higher growth levels


The International Monetary Fund (IMF) says through its fiscal and monetary policies, South Africa has made impressive strides in rebuilding its economy since the country attained democracy.

Briefing the media at the conclusion of his visit to South Africa yesterday, IMF Managing Director Rodrigo de Rato said the country's average growth rate had more than doubled to around three percent, with inflation brought firmly under control.

He said public finances had been strengthened and more resources allocated to the social sectors, adding it was also possible for South Africa to achieve its targets of halving unemployment by the year 2014.

On his two-day visit in the country, Mr de Rato met with President Thabo Mbeki, Finance Minister Trevor Manuel, Reserve Bank Governor Tito Mboweni and the private sector.

He said after the meetings it appeared that South Africa's fiscal and monetary policies could sustain the country's economic growth.

"South Africa has made inroads in reducing poverty and improving the delivery of basic amenities, but much remains to be done.

"South Africa has strengthened its international reserve position and is now much more resilient to external shocks," said Mr de Rato.

However Mr de Rato said the country's economic growth would need to be elevated to a higher level if there was to be a significant fall in unemployment.

"This will involve strengthening South Africa's ability to attract investment by continuing efforts to improve productivity and competitiveness.

"It will also require pushing ahead with introducing labour market flexibility. Mr Mbeki and I agreed more work needs to be done to gain a better understanding of the causes and extent of unemployment," he said.

He said the IMF supported privatisation especially on electricity.

Referring to HIV and AIDS, Mr de Rato said the epidemic had taken a devastating toll on human life in the country. He however complimented the government's response saying it was forceful and positive.

Mr de Rato is expected to hold discussions with a number of African leaders at the African Union summit on employment and poverty scheduled to commence in Ouagadougou, Burkina Faso, to get deeper appreciation of the problems facing the continent.

Source: BuaNews