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2019 OECD Economic Surveys: South Africa 2019

Since 2013, South Africa's growth has been below 2%, leading to stagnating or decreasing GDP per capita. Policy uncertainty has been the main driver of low confidence and economic uncertainty. Investment is subdued and unemployment reached 30% and 50% of the youth. The persistent low growth has accentuated fiscal difficulties under high spending pressures. The government needs to free some fiscal space. Curbing government wage bill, restructuring SOEs and finding additional financing of higher education are urgent to limit further deterioration of public finance. South Africa needs a bold reform agenda to boost growth in the short run while increasing long term potential growth. Efforts to improve the business climate, sequencing and prioritisation of reform will be essential for maximising the growth impact. Developing tourism and boosting transport infrastructure investments would contribute to growth in the short run and to job creations. The current social protection system is incomplete. The current pension system does not alleviate the risk of old-age poverty and access to quality health care is uneven. South Africa needs to build an inclusive social protection system including a mandatory pension scheme and reforming public health system to improve the quality of care and equal access.

SPECIAL FEATURE: SOCIAL PROTECTION AND TOURISM

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