Government must spend to improve SA's economy, even if it means borrowing - analyst
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Duma Gqubule with the Centre for Economic Development and Transformation discussed this year's national budget as a guest on Eusebius on TimesLIVE.
He argued that the government's projection of an economic growth rate below 2% over the next few years will result in greater levels of unemployment which, in turn, will increase social strife in South Africa. One of several government mistakes, argues Gqubule, is to focus relentlessly on keeping the debt level as low as possible, and slavishly obsessing about inflation targeting. Although anathema to some economists, Gqubule made a passionate case for why an ambitious stimulus package is necessary in order to unlock economic growth within the economy. If, for example, we were to enjoy another commodities windfall, he argues, that income should be used to stimulate growth, and to unlock jobs rather than to quickly pay off our national debt.
He argued that the government's projection of an economic growth rate below 2% over the next few years will result in greater levels of unemployment which, in turn, will increase social strife in South Africa. One of several government mistakes, argues Gqubule, is to focus relentlessly on keeping the debt level as low as possible, and slavishly obsessing about inflation targeting. Although anathema to some economists, Gqubule made a passionate case for why an ambitious stimulus package is necessary in order to unlock economic growth within the economy. If, for example, we were to enjoy another commodities windfall, he argues, that income should be used to stimulate growth, and to unlock jobs rather than to quickly pay off our national debt.
