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The Federation of Unions of South Africa (FEDUSA) is overly positive about the findings of the International Monetary Fund (IMF) Executive Board about the economy of South Africa. While the Federation supports the positive acknowledgement about macroeconomic policy, it shares the IMF’s concerns regarding unemployment and the lack of global demand.

According to the Public Information Notice (PIN) issued yesterday to “promote transparency of the IMF's views and analysis of economic developments and policies”, “South Africa faces the immediate challenge of conducting policy under a highly uncertain global environment and making firm progress on reforms that promote the long-run inclusive growth needed for maintaining social cohesion.”

The PIN alludes to factors such as the global slowdown in demand affecting the South African economy, and how this is likely to moderate Gross Domestic Product (GDP) growth to 2,6%.

“We support the IMF’s view that countercyclical macroeconomic policies will assist us,” continued George. “They make specific mention of the recent 50 basis point reduction in the repo rate, and how this was a wise move. We fully agree with that sentiment,” said FEDUSA General Secretary Dennis George.

The PIN also holds that “the stubbornly high unemployment rate could become politically and socially unsustainable. South Africa needs to build on its many policy successes to expand employment opportunities, secure better education and health outcomes, and build more efficient infrastructure to support inclusive growth, while maintaining macroeconomic and financial stability in a risky global environment.”

“We fully share the concern of the IMF about the unemployment problem in our country, as well as the need to drastically improve our education, healthcare and investment in infrastructure. These are not new facts and serve to underline FEDUSA’s policy stance over the past decade. However, we remain positive about South Africa’s future and we believe that, if we focus on the right things, we will continue to grow our economy to create more and better jobs”, George concluded.