IMF: South Africa needs decisive efforts to cut spending

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A senior official from the International Monetary Fund (IMF) has highlighted the urgent need for South Africa to take decisive actions to decrease its spending and lower its debt compared to its gross domestic product (GDP).

By 2029, it’s projected that South Africa’s debt to GDP ratio will soar to nearly 86%, up from 74% in 2022. Era Dabla-Norris, the deputy director of Fiscal Affairs at the IMF, emphasized the importance of implementing measures to address this concerning trend.

To tackle this issue, Dabla-Norris suggested several strategies. These include reducing financial support to state-owned enterprises, streamlining subsidies that aren’t effectively targeted, and implementing significant structural reforms aimed at boosting economic growth. She stressed that South Africa’s immediate focus should be on resolving its energy and logistics challenges, which are crucial for the country’s economic stability.

Source: Reuters

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