Apprehensive rand teeters on back foot after IMF warning

The visit, a three-week follow-up from one in May, highlighted the major challenges facing the country, which include prolonged weak economic growth marked by rising unemployment, inequality and greater credit-rating risk if the government did not act fast to implement reform, a deteriorating fiscal situation and difficulties in the operations of state-owned enterprise.

“The IMF recommends that South Africa creates an environment conducive for private sector investment and take a decisive approach to implement structural reforms in order to boost economic growth,” said a statement from the Treasury. It said interventions undertaken since the IMF May visit included the approval of the Integrated Resources Plan, simplified visa regime and the scrapping of a requirement for unabridged birth certificate for children entering the country. The cumbersome regulation was widely blamed for low tourist numbers to the country.

In October, the Treasury downgraded its growth forecast to just 0.5percent for this year, down from the 1.5percent projection made in February, as the economy battles high unemployment and a rising public service wage bill.