Friday, 13 October 2017

SARB governor talks barriers to economic growth.

Kganyago’s views on monetary policy and
regulations are highly sought after in the United States.(SABC)
“There is no country that has ever sustainably brought down the levels of poverty or unemployment unless that economy was growing”. That’s the view of South African Reserve Bank (SARB) Governor Lesetja Kganyagowho is participating in the biannual meetings of the International Monetary Fund (IMF) and World Bank in Washington.

The central bank chief weighed in on the back of the IMF lowering its growth forecast for South Africa to just 0.7% for 2017 well below Sub Saharan growth of 2.4% and global growth of 3.6%. Kganyago’s views on monetary policy and regulations are highly sought after in the United States. With the global economy experiencing its broadest based recovery in a decade, South Africa is lagging behind.

“There is no country a that has ever brought down the levels of poverty or the levels of unemployment unless that economy is growing, there is not country that I know that has been able to deal with inequality unless that economy is growing. There is no country that I know that is able to deal with its fiscal challenges unless that economy is growing. So the message is very clear for SA, you want to deal with unemployment, you want to deal with inequality, you want to deal with poverty, get this economy growing,” said Kganyago.

He pointed to South Africa’s greater resilience to vulnerabilities than it was four years ago, a stronger balance sheet, fiscal consolidation and 8 months of consecutive trade surpluses but emphasized that monetary policy couldn’t do it alone, particularly as it relates to ratings agencies.

“One of the things that had been raised had to do with the issues of growth and the things that was coming is that you’re not going to be able to get growth by just the manipulation of fiscal and monetary policy, you need structural change. That is what everybody is talking about the world over, and in the case of South Africa, it’s not like we have got to try and figure out what these structural reforms are, they are spelled out in the National development Plan,” he said.

The Governor encouraged greater engagement between the private and public sectors and called for a predictable policy environment that will encourage greater and much needed investment in the country.

"Just talking to businesses is not going to bridge that trust on its own, what you actually need is for government to create the necessary policy setting so that businesses know that when I invest the rules of the game are not going to be changed after I have sunk my money."

When asked whether or not was a particular outcome at the ANC’s elective conference that would make his job easier, he had this to say: “There will be an outcome that will make my job easier and that outcome will be an outcome that removes all the political uncertainties that SA has. That outcome should be an outcome that will remove the policy uncertainty that SA has, that outcome that I would favour would be that outcome that restores business confidence and thus sets SA to take advantage of the resurgence in the global economic activity.”

The IMF World Bank meetings conclude on Sunday.



Culled from SABC.
By Sherwin Bryce-Pease.


No comments:

Post a Comment