Growth rates of between five and six percent were achievable for South Africa over the long term, the International Monetary Fund (IMF) said on Thursday.
”It is a bold and ambitious target but achievable,” IMF senior representative for SA and Lesotho, Vivek Arora, said at the release of surveys on its world and regional economic outlooks.
It would require the implementation of ”policy measures” to improve public enterprises, trade liberalisation and efficiency in the labour market, he said.
The IMF believed the rand was trading at a fair rate.
”On the basis of various objective criteria, we feel that the value of the rand is in line with South Africa’s macro-economic fundamentals,” said Michael Novak, deputy director of the IMF’s African department.
According to the IMF’s report, growth in sub-Saharan Africa slowed slightly in 2005 from its strong performance in 2004.
Growth for the region was expected to ease to 4,5%, down from 5,3% in 2004.
”The disturbing news is that this rate of growth will be insufficient to meet the Millennium Development Goals to reduce poverty.”
The IMF blasted Zimbabwe for casting a cloud over the region.
Novak said investors were nervous about coming to the region because of events there.
”For foreign investors not aware of the politics that make up the region, what they see in Zimbabwe has the potential for spreading.”
He said the Zimbabwean economy had shown remarkable resilience, but that he doubted this could go on for much longer.
”At some point, the Zimbabwean economy is going to grind to a halt. Rapid or urgent policy action is needed,” he said. – Sapa