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Cape Town - Government has been hard at work the past few days to finalise measures to preserve fiscal discipline and debt sustainability, as well as measures to support growth, National Treasury said in a statement on Thursday afternoon.
The measures are mainly undertaken through the Presidential Fiscal Committee (PFC).
This was in reaction to the recent visit by a delegation by the International Monetary Fund (IMF) to SA to obtain an economic update on the country.
Treasury said it would reveal more about the measures "at the appropriate time". The IMF met with government, the SA Reserve Bank (SARB), state-owned enterprises (SOEs), business and academics.
"The IMF welcomed the role of the PFC, which signals the political will to tackle long-standing reforms and remove obstacles to investment, which will unlock the economy’s growth potential," said Treasury in a statement.
"The National Treasury appreciates the IMF’s findings and the urgency it places on the implementation of structural reforms to reignite growth. The messages signal the difficult period ahead, where decisive actions to grow the economy and create the much needed jobs are required."
According to Treasury, the main findings of the IMF were that SA continued to face a challenging economic outlook for both 2017 and 2018, despite a recovering global economy.
The IMF noted that the implementation of some key reforms has stalled and many SOEs - which should be engines of growth - remained inefficient. Furthermore, the IMF found that an accelerated pace of implementing structural reforms could prompt a recovery in business and consumer confidence, which could improve economic growth.
As Fin24 reported Wednesday, the IMF said SA’s subdued economic growth of just 0.7% for 2017 was not likely to improve much next year.
Challenging outlook
The IMF concluded that "despite SA’s institutional strength and favourable global conditions, increasing domestic political uncertainty and stalled reforms point to a challenging economic outlook".
It noted that some sectors, including agriculture and mining, were generating growth, but other key activities have stagnated or declined, as investment decisions were being postponed or abandoned.
The IMF said it expected SA's economic growth to recover only gradually in the medium term, unless the pace of implementation of structural reforms accelerated quickly enough to prompt a clear recovery in business and consumer confidence.
South Africa's total revenue shortfall, over three years, may reach R209bn, based on Treasury predictions.
The IMF also advised the presidential fiscal committee that reforms to improve governance and procurement practices and "remove any obstacles to investment” were essential.
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