JOHANNESBURG – South Africa‘s economy is not growing quick enough to build jobs, but growth rarely is in stimulated by adjusting the macroeconomic policy, the Treasury’s Director General said on Tuesday.
South Africa‘s unemployment currently hovers around 27% of the labour force, while data on Monday showed employment during the formal sector fell by 0.2% to 9.273 million individuals the primary quarter of this year.
“Its unlikely that growth as well as stimulation within the economy can come from tinkering or manipulation of macroeconomic policy variables just like adjusting your fiscal policy, this means that reducing taxes or increasing expenditure,” Lungisa Fuzile told an organization conference organised from the Gordon Institute of Business Science in Johannesburg.
Finance Minister Pravin Gordhan unveiled his budget in February which included a deal of spending cuts, civil service job freezes and moderate tax hikes on property sales, fuel, alcohol and capital gains as South Africa strives to further improve growth and get away from consumer credit rating downgrades.
Fuzile said the choice of which taxes to boost and also what amount was informed by developing sure the damage to economic growth was minimised.
The Treasury estimates Africa‘s most industrialised country could grow by 0.9% in 2010 in comparison with 1.3% in 2015, as the central bank and the International Monetary Fund have forecast 2016 growth at 0.6%.
Fuzile said the Treasury would probably need to lower its growth forecasts in October’s medium-term budget policy statement.
