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Johannesburg - Economic growth of 3% to 4% is the best South Africa can hope for unless further structural changes happen.
On Tuesday Old Mutual Investment Group (Omigsa) chief economist Rian le Roux said that sluggish growth prospects in most developing economies for the next five to 10 years mean that South Africa will have to depend mainly on its own policy initiatives to realise its economic goals.
Last week Finance Minister Pravin Gordhan said that the South African economy needed to grow at 7% for the next 20 years to have a real impact on poverty and unemployment.
According to Le Roux, the necessary structural changes include government allaying investors' fears of macroeconomic instability by re-committing itself to inflation targeting, rejecting nationalisation and striving for smaller budget deficits.
Le Roux says labour legislation that constrains job creation needs to be urgently and carefully reconsidered. The education system needs to be cleaned up rapidly so that it can feed the labour market with people with the necessary skills and qualifications.
To improve economic growth, he reckons, government first has to accept that there are no magical or instant solutions like a weakening of the rand, nationalisation or the abandoning of inflation-targeting.
Government has to realise that its role in growth and job creation is to create an environment in which the private sector can flourish.
- Sake24.com
For business news in Afrikaans, go to www.sake24.com.
On Tuesday Old Mutual Investment Group (Omigsa) chief economist Rian le Roux said that sluggish growth prospects in most developing economies for the next five to 10 years mean that South Africa will have to depend mainly on its own policy initiatives to realise its economic goals.
Last week Finance Minister Pravin Gordhan said that the South African economy needed to grow at 7% for the next 20 years to have a real impact on poverty and unemployment.
According to Le Roux, the necessary structural changes include government allaying investors' fears of macroeconomic instability by re-committing itself to inflation targeting, rejecting nationalisation and striving for smaller budget deficits.
Le Roux says labour legislation that constrains job creation needs to be urgently and carefully reconsidered. The education system needs to be cleaned up rapidly so that it can feed the labour market with people with the necessary skills and qualifications.
To improve economic growth, he reckons, government first has to accept that there are no magical or instant solutions like a weakening of the rand, nationalisation or the abandoning of inflation-targeting.
Government has to realise that its role in growth and job creation is to create an environment in which the private sector can flourish.
- Sake24.com
For business news in Afrikaans, go to www.sake24.com.
