9 January 2012
Emerging economies – and South Africa as one of the key players among them – are an important part of the solution to the problems besetting the global economy, International Monetary Fund chief Christine Lagarde said during her first visit to South Africa on the weekend.
Lagarde, who visited Nigeria and Niger before arriving in South Africa at the weekend, met with President Jacob Zuma in Bloemfontein on Saturday following talks with Finance Minister Pravin Gordhan, Planning Minister Trevor Manuel and Reserve Bank Governor Gill Marcus on Friday.
“In these difficult times for the global economy, emerging economies are a key part of the solution,” she said in a statement following her meeting with Zuma.
“South Africa has an important role to play on behalf of the interests of developing economies and the African continent in particular. As a member of the G20, it has a leadership role to play in making the voice of Africa heard. I’m confident that it will continue to do so.”
Lagarde described South Africa’s recent economic performance as “impressive”, saying that good macroeconomic policies, together with a flexible exchange rate and sound financial sector, had mitigated the drop in output experienced during the global recession of 2008-09.
“Prudent fiscal management in the mid-2000s created the space that allowed fiscal policy to be supportive in recent years, mitigating the worst effects of the global economic slowdown and domestic recession.”
At the same time, she noted, the ongoing debt crisis in Europe, one of South Africa’s main export markets, presented “significant downside risks” to the country’s economic outlook.
“In this context, we agreed that the challenge now is to ensure that monetary policy remains supportive and competitiveness improves.
“At the same time, moderation in wage growth and enhanced competition would support the ongoing recovery and lay the foundation for higher growth in the medium term.”