OECD Economic Surveys: South Africa 2010
Hide / Show Abstract

OECD Economic Surveys: South Africa 2010

OECD's periodic review of South Africa's economy.  This edition features chapters covering moving beyond the crisis and finding a sustainable growth path, strengthening the macroeconomic policy framework, and closing the labour utilisation gap.

Click to Access: 
    http://oecd.metastore.ingenta.com/content/1010111e.pdf
  • PDF
  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-south-africa-2010_eco_surveys-zaf-2010-en
  • READ
 
Chapter
 

Strengthening the macroeconomic policy framework You do not have access to this content

English
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1010111ec005.pdf
  • PDF
  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-surveys-south-africa-2010/strengthening-the-macroeconomic-policy-framework_eco_surveys-zaf-2010-5-en
  • READ
Author(s):
OECD

Hide / Show Abstract

South Africa’s macroeconomic framework has served the economy well, but should be strengthened to make the economy more resilient to external shocks. Enhancing the credibility of the inflation target would provide the monetary authorities with more space for flexibility in the face of exogenous shocks. To ease the pressure on the exchange rate emanating from high commodity prices and sentiment-driven surges in capital inflows, the accumulation of foreign exchange reserves by the central bank should be more rapid, and the removal of remaining controls on capital outflows should be accelerated. Fiscal policy has been generally sound, but should be made tighter and more countercyclical during the economic upswings to prevent a structural deterioration of the fiscal balance and to create more room for manoeuvre during downturns. A fiscal rule that institutionally constrains discretionary fiscal policy may facilitate this task and ensure that the strong public commitment to address major social challenges, improve access to public services and promote long-term growth by investing in physical infrastructure and human capital can be sustained. In conjunction with a greater effort to identify and tax economic rents from natural resource extraction, consideration should be given to establishing a mechanism to manage commodity price windfalls.
Also available in French
 
Visit the OECD web site