The South African government has welcomed proposed policy recommendations that the International Monetary Fund (IMF) made during its recent visit to the country, the National Treasury said on Tuesday.
The IMF visited the country end of May to discuss economic developments in the country. During the five-day annual visit, the IMF staff met with government, the South African Reserve Bank, state-owned enterprises, business and academia.
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, the US-based institution told Treasury in a statement.
“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 state-owned enterprises, especially Eskom,” the IMF added.
The IMF also found that inflation had remained at or below the mid-point of the official target range and financial stability has been maintained.
Responding to the IMF’s findings, National Treasury said the South African government was cognisant of this and work was underway to address these problems.
Steady progress has been made with regard to structural reforms since South Africa’s previous consultation with the IMF in May 2018, Treasury added.
Among these was the published Mining Charter, which assisted in providing regulatory certainty. This was after government withdrew the Mineral and Petroleum Resources Development Amendment Bill, the agency said.
NM/jn/APA