The International Monetary Fund (IMF) has warned that South Africa’s weak economic growth cannot be blamed on the global economic situation, saying that local issues like labour disputes and political uncertainty are limiting growth and investment.
The IMF said in a report released Tuesday that “South Africa faces low growth, widespread unemployment and a high reliance on foreign capital inflows. The weak global economic outlook is not helping, but ultimately, the country needs to move ahead with planned structural reforms to boost growth and create jobs.”
It projects growth this year to slow down to 2% and to recover only slightly to 3% – 3.5% in the next few years.
The report notes that lower wage demands by trade, the implementation of the National Development Plan by government and massive infrastructure spending proposals would spur economic growth.
It says that more jobs will be created if economic growth are stronger and the labour market more flexible.