Johannesburg - Low interest rates may not encourage the
right investment in the economy, Finance Minister Pravin Gordhan said on
Monday.
"There is a view among some economists that low interest rates... are incentivising the wrong kind of investment in the economy," he told an SA Chamber of Commerce and Industry dinner in Johannesburg.
Low interest rates appeared to encourage investment in
technology and capital intensive areas rather than labour absorptive
activities, he said.
The SA Reserve Bank has since November last year kept
interest rates at their lowest level in over 30 years.
This could be counterproductive to South Africa's goals of growing the economy to create more jobs, he said.