- Economists have warned that President Cyril Ramaphosa’s much vaunted economic stimulus package might not be the right way to get the economy back on track
- President Cyril Ramaphosa and cabinet recently resolved that the economy needed an urgent stimulus package to recover from the recession
- Economists have pointed out that the economy needs a turnaround plan and might not be able to absorb the R43 billion stimulus package
Economists have warned that President Cyril Ramaphosa’s much vaunted economic stimulus package might not be the right way to get the South African economy out of a technical recession. Economists believe the economy needs a solid turn-around plan due to the scale of the sectors affected.
Iraj Abedian from Pan-African Investment and Research Services said the South African economy had suffered massively in recent times and due to the scale of the contraction which has affected key sectors the economy might not be able to absorb the stimulus.
Abedian said because nearly every sector of the economy had been affected by contraction and needed revival to a greater or lesser extent the government would be better off in providing a turn-around package based on solid and tangible economic principles.
Briefly.co.za gathered that this sentiment was echoed by Viv Govender a senior analyst at Rand Swiss who also called for a comprehensive turnaround plan. Govender added that Ramaphosa needed to provide policy clarity.
Eyewitness News reported that Govender said the agriculture sector, in particular, would benefit from policy certainty regarding land expropriation without compensation. He pointed out that the uncertainty about how expropriation would be implemented was damaging the agri-sector.
Cabinet recently resolved that an urgent economic stimulus package was needed to revive the economy and drag it out of the current technical recession.
To this end, Ramaphosa is expected to announce a R43 billion stimulus package later on Friday. The main focus of the package is expected to be the agriculture, manufacturing and mining sectors.
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