The International Monetary Fund (IMF) has sounded the alarm over the slowdown in the South African economy amid long-standing structural constraints with implications for employment, poverty and inequality.
Weak growth over the past decade has been caused by structural constraints that have made government policies, whether fiscal or monetary, less effective in stimulating economic activity, IMF said after a visit in South Africa which ended on Tuesday.
The Bretton Woods institution stressed that the South African economy stood to benefit from rising commodity prices, but instead remained “stagnant in an environment of weak growth due to slow reforms, as well as continuing problems with state-owned companies”.
In addition, the IMF noted that a series of shocks have negatively affected growth prospects and price stability in the country, including the floods that devastated the east coast, the uncertainty surrounding the war in Ukraine, as well as the tightening of global financial conditions.
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