NATIONAL: (By Steve Jobs)– South Africa’s slow pace economy is spelling disaster due to its complex structural hiccups and it is feared that if rising fiscal deficit at 4,9 % and current account deficit at 6.1 % of GDP for 2013 remain in motion, country will have to suffer reversal of capital inflow. (Story prepared and released by The South Africa News. www.thesanews.co.za)
These are revelations put forth in report by the International Monetary Fund about South Africa 2013 economic trends cautioning that dismal situation has left the economy exposed to both internal and external shocks.
Report said that only way for survival was to boost up sluggish growth with the forecast at 2% for 2013 and 3% in 2014. South Africa has to fast –track structural reforms fixing the gigantic problem of unemployment, report added.
Reversal of capital flows and a “disorderly adjustment” in the fiscal and current account deficits are the major factors that have put the economy in peril.
The country is also exposed to a further regression in Europe and China besides other emerging markets, coupled with downward trend in commodity prices”, Report disclosed.
It is highly demanding to roll out structural reforms in labour and product markets planed in the National Development Plan (NDP). Reforms were recipe of life to withering economy, according to the fund.
Trade liberalisation may play an important role for sound competition helping South Africa to optimize leverage from Africa’s growth dynamics, the report opined.
On the labour market front, IMF report explained that measures to fine tune skill mismatch could help unleash job creation. “Several businesses have potential for robust job creation but require cutting-edge labour framework”, IMF report suggested.
Report also thrust upon a workable deal between government, labour and business. This could nurture job creation with consolidating public services from the government.
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