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Johannesburg - South Africa's economy is likely to grow around 3.25% this year, compared to the 2.8% forecast by the country's reserve bank, but not enough to create jobs, IMF said Tuesday.
In its Article IV staff report the International Monetary Fund saw medium term growth reaching 4.5 percent by around 2014.
"The recovery most recently has been led by a rebound in activity in the export-oriented and interest sensitive sectors: mining, manufacturing, and financial services."
Despite the forecast for economic growth this year the report said job creation still remained the country's main challenge.
South Africa's official unemployment rate is at 24.5% of the workforce.
"The overriding economic policy challenge is reducing unemployment and inequality through higher economic growth. On the macro economic front, this requires fiscal and monetary policies that will sustain the ongoing recovery while gradually shifting to a more neutral stance so that economic recovery takes hold.
"Second, because the likely growth path under current policies is only going to have a limited impact on unemployment, there is a need for reforms to improve the efficiency of labour and product markets," said the IMF in a statement.
South Africa's economy fell into recession in the last quarter of 2008 but it lasted only nine months and was relatively mild compared to the economic downturn experienced in wealthier countries.
The recession was the first in 17 years, ending a period of prolonged growth since 1994.
The national treasury department described the report as a fair assessment of the economic conditions in South Africa.
"The government will consider the recommendations made by the IMF and other international organisations," the department said in a statement.
In its Article IV staff report the International Monetary Fund saw medium term growth reaching 4.5 percent by around 2014.
"The recovery most recently has been led by a rebound in activity in the export-oriented and interest sensitive sectors: mining, manufacturing, and financial services."
Despite the forecast for economic growth this year the report said job creation still remained the country's main challenge.
South Africa's official unemployment rate is at 24.5% of the workforce.
"The overriding economic policy challenge is reducing unemployment and inequality through higher economic growth. On the macro economic front, this requires fiscal and monetary policies that will sustain the ongoing recovery while gradually shifting to a more neutral stance so that economic recovery takes hold.
"Second, because the likely growth path under current policies is only going to have a limited impact on unemployment, there is a need for reforms to improve the efficiency of labour and product markets," said the IMF in a statement.
South Africa's economy fell into recession in the last quarter of 2008 but it lasted only nine months and was relatively mild compared to the economic downturn experienced in wealthier countries.
The recession was the first in 17 years, ending a period of prolonged growth since 1994.
The national treasury department described the report as a fair assessment of the economic conditions in South Africa.
"The government will consider the recommendations made by the IMF and other international organisations," the department said in a statement.
