Foreign investment, jobs and stellar economic growth all depend on the government of national unity which chose a reform path underpinned by mostly centrist economic policies and respect for the Constitution.
“Our doom loop culminates with the ‘crowding out’ of the private sector and lower foreign capital inflows due to insufficient potential returns on investment. Our hope is that economic reforms under the GNU will steer South Africa to a higher growth scenario. The alternative slide towards populism would be fiscally catastrophic.”
“As a consequence, the balance sheet of the state is deteriorating, pushing the country further along an unsustainable fiscal path. This penchant for consumption rather than investment is a leading cause of rating agency downgrades and pressure on interest rates.” He warns that one cause for concern is that the deflationary effect from lower global goods prices is beginning to fade. There are three structural forces in play that could keep inflation sticky and prevent central banks from cutting rates.
“Headway has been made in addressing electricity supply concerns, but logistics and water infrastructure shortcomings pose a significant threat to growth too,” he warns.
Belgique Dernières Nouvelles, Belgique Actualités
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