MAGDA WIERZYCKA: Fiscal consolidation is the only way out of SA’s economic quagmire
Fiscal consolidation means that the sale of state assets is on the table, as are job cuts, low and volatile investment returns, lower wage increases and generally negative sentiment
How the world has changed in just eight months. This year kicked off in an exuberant mood with equity markets fuelled by synchronised strong global growth forecasts for 2018 and the announcement of tax cuts in the US. The rand staged a valiant recovery to R11.50/$, and the FTSE/JSE all share index rose above the 60,000 level on optimism about SA’s prospects following the election of Cyril Ramaphosa as ANC president. After he became president of the country, Ramaphosa’s rapid action against corruption — particularly at Eskom — combined with a powerful presence on the Davos stage, made us proud. He undertook to tackle the impasse in the mining sector created by the Mining Charter and ruled out the nuclear programme. The Reserve Bank revised its growth forecast for 2018 to 1.4%. The only blot was the sell-off in bonds sparked by the prospects of higher-than-expected US interest rate increases. A bare eight months later SA is in a recession, unemployment is at record highs, the rand is ...