## South Africa: 2019 Article IV Consultation—Press Release; and Staff Report; and Statement by the Executive Director for South Africa

_IMF Staff Country Reports, January 30, 2020_

## Source details

**Canonical URL:** [South Africa: 2019 Article IV Consultation—Press Release; and Staff Report; and Statement by the Executive Director for South Africa](https://www.imf.org/en/publications/cr/issues/2020/01/29/south-africa-2019-article-iv-consultation-press-release-and-staff-report-and-statement-by-49003)

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## Bibliographic details
- Published: January 30, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513528502.002

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### Key findings on growth and labor markets
- Subdued private investment and exports, and increased uncertainty have depressed growth and worsened social indicators.
- Given the structural nature of the growth slowdown, reforms are needed that reduce the cost of doing business and boost private investment.
- Subject tags include: Banking, Fiscal policy, Fiscal stance, Inflation, Labor, Labor markets, Prices, Public debt, Revenue administration.
- Keywords include: Africa, CR, debt, Fiscal stance, Global, government, government policy, headline CPI inflation, IMF South Africa team, Inflation, inflation target range, ISCR, Labor markets, policy, policy directive, U.S. dollar.

### State-owned enterprises (SOEs), fiscal position, and public debt
- SOEs’ risks are materializing, triggering government bailouts of Eskom and administrative intervention in other entities.
- High fiscal deficits have boosted debt.
- Recommendation: establish a credible debt anchor to stabilize debt in the medium term.
- In the absence of fiscal space, a gradual and growth-friendly fiscal consolidation and increased spending efficiency are needed.
- The consolidation should be accompanied by structural reforms to support private investment.

### External position and financial flows
- Nonresident investors are shedding equities and local currency bonds but showing appetite for foreign currency sovereign bonds amid supportive global financing conditions.
- The external position is assessed as moderately weaker than implied by fundamentals and desirable policies.

### Inflation and prices
- Inflation has slowed to around the mid-point of the target band, aided by one-off factors, but inflation expectations are higher.
- Keywords highlight focus on headline CPI inflation and the inflation target range.

### Banking sector and financial stability
- Banks are sound, albeit with pockets of vulnerabilities.

### Policy recommendations and priorities
- Implement a gradual, growth-friendly fiscal consolidation paired with spending-efficiency improvements.
- Establish a credible debt anchor to stabilize public debt in the medium term.
- Pursue structural reforms to lower the cost of doing business and boost private investment, addressing the structural nature of the growth slowdown.

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_Source: https://www.imf.org/en/publications/cr/issues/2020/01/29/south-africa-2019-article-iv-consultation-press-release-and-staff-report-and-statement-by-49003_