Govt’s finances will remain constrained: Economist

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Economist Hannah Marai says government’s finances will remain constrained as the country’s economy grows below 1%.

Marai says persistent shortages of electricity and constraints of the country’s ports and rail are undermining economic growth amid external pressures.

The International Monetary Fund revised South Africa’s growth downwards to 1% due to these domestic challenges.

The Reserve Bank has also only projected growth of 1.2% this year.

Marai says infrastructure investments required to grow the economy and create jobs should be around 30 percent of GDP.

However, she says it’s currently at only 15%.

“Staying on the expenditure side, we talk about jobs and what we need to do to grow the economy. I think we know exactly what we need to do and one of the big fundamental blocks beyond solving for load shedding, solving for our ports and railway and our logistics crisis is investment in broad infrastructure and gross fixed capital formation. If we look at our previous budget it is noted as a priority,” says Marai.

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