Growth! What Growth
The IMF and the South African Reserve Bank (SARB) indicated that South Africa will continue to grow slowly, or in the case of the SARB not at all. The SARB projects a growth rate of 0% for 2016. Bloomberg has a good summary of the IMF reasoning. The SARB says:
The domestic economic growth outlook remains extremely challenging, following the contraction in G DP in the first quarter of this year. Although this is anticipated to have been the low point of the cycle, the recovery is expected to be weak. The Bank’s latest forecast is for zero per cent growth in 2016, compared with 0,6 per cent previously. Growth r ates of 1,1 per cent and 1,5 per cent are forecast for the next wo years, down from 1,3 per cent and 1,7 per cent previously. The Bank’s estimate of potential output has been revised down marginally to 1,4 per cent in 2016, rising to 1,7 per cent in 2018. This growth outlook is corroborated by the persistent negative trend in the Bank’s leading indicator of economic activity. Business confidence remains low with the RMB/BER business confidence indicator falling to its lowest level since 2009 in the second quarter of this year.
For the full version, and some interesting assumptions, click this link.
IMF on Bridging South Africa’s Economic Divide
David Lipton (First Deputy Managing Director, IMF) delievred a speech at WITS Business School. It is an important speech, with Business Day provided a good review of the major points in the speech. Peter Bruce provides an endorsement of the ideas presented by Dr. Lipton. I was in attendance, and was not impressed with the argument being made, because it does not tackle distributional issues, and instead argues that market efficiency will solve youth unemployment and our growth problems. More on this in coming issues.
What books do the policy elites read?
The Government Technical and Advisory Centre held an interesting Winter School. I did not attend, but the presentations look interesting and challenging. Particapants provided a list of books they would recommend [PDF]. It provides an interesting insight into what policymakers are reading, thinking and in the fancy term what the ‘ epistemic community” values. We would recommend to each of them to read the $100 Start Up and The White Tiger.
Our policy elites should also take note of provincial economics. Entrepreneurs should take note as well. The Trade and Industrial Policy Strategies (TIPS) has released the annual REB Provincial Review analyses developments in the real economy and in development policies and projects at the provincial level. The 2016 bulletin is now available. See The Real Economy Bulletin Provincial Review 2016.
Cover Image: From the GTAC Newsletter