Cenbank says S.African economic growth "woefully inadequate"

PUBLISHED: Fri, 30 Sep 2016 09:44:16 GMT

South Africa’s flat-lining growth won’t solve problems facing Africa’s most industrialised economy and government needs to stabilise policies to reassure investors, deputy central bank governor Daniel Mminele said on Friday.

South Africa is struggling with high unemployment, poverty and student unrest while infighting in the ruling African National Congress and accusations of government corruption are hobbling much-needed economic reforms.

“Clearly, the growth rates that were seeing … are woefully inadequate to address the challenges we have as a country,” Mminele said, adding that policy certainty and business friendly measures were needed to encourage investment.

The reserve bank is close to ending its monetary policy tightening cycle but the bar for cutting interest rates remains high, Mminele told a financial conference.

The bank last week kept interest rates unchanged at 7 percent for a third consecutive meeting, revising its growth outlook up to 0.4 percent from zero percent.

The bank expects inflation to average 6.4 percent in 2016, slightly down from an earlier forecast of 6.6 percent. The target range is 3-6 percent and inflation now stands at 5.9 percent.

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