A plan for growth, Treasury tells IMF

The government has pointed to the National Development Plan as its response to the IMF’s statement that SA’s economy is vulnerable to external shocks and funding shortfalls.

The government has pointed to the National Development Plan (NDP) as its response to the IMF’s statement that the country’s economy is vulnerable to external shocks and funding shortfalls.

The Treasury said the Cabinet had considered the IMF’s report towards the end of June.

“The government aims to address challenges including inequality, poverty and unemployment through its budget, which is highly redistributive, as well as other vehicles of economic transformation.”

“The NDP remains [the] cornerstone for inclusive growth, aiming to address binding constraints, tackle infrastructure bottlenecks and accelerate inclusion,” the Treasury said.

But, it made no mention of the “action plan” Finance Minister Malusi Gigaba is set to unveil to turn around SA’s economic fortunes.

Gigaba said at the opening of the tax season that the Treasury had an action plan “with timelines to implement certain structural reforms in the economy in order to boost business confidence so that we can get the economy reignited”.

The IMF met representatives from the government, the Reserve Bank, state-owned entities, business and academia.

In an executive report released on Thursday, based on its meetings in SA, the IMF said it still expected economic growth of 1% in 2017 but policy uncertainty linked to political turbulence would weigh on business and consumer confidence.

The report noted that macroeconomic policies and robust economic growth were mutually reinforcing after 1994, but the rate of economic growth and poverty reduction had stalled in recent years.