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<\/a><\/p>\nIf the relief package can\u2019t be fully offset, then the government must fast-track the implementation of structural reforms that attract private investment, lift economic growth and create jobs, according to Alier.<\/p>\n
Africa\u2019s most-industrialized economy contracted the most in a century in 2020 and lost 1.4 million jobs as restrictions to curb the spread of the coronavirus weighed on output and forced some businesses to cut wages, reduce staff or close permanently.<\/p>\n
The unemployment rate, which reached a record 32.6% in the first quarter, has remained above 20% for at least two decades.<\/p>\n
\u201cThe social support that is being discussed is a temporary band-aid solution,\u201d Alier said. \u201cThe ultimate solution is to create the conditions for people to get jobs.\u201d<\/p>\n
Energy security and the allocation of broadband spectrum should be the government\u2019s top reform priorities, he said. Authorities should also work on labor-market changes and enhance competition, which will make the economy more dynamic, and create room for small-and-medium businesses to grow and create jobs, he said.<\/p>\n
While the IMF is due to raise its 2021 economic growth forecast of 3.1% for South Africa on July 27, after a better-than-expected first-quarter expansion, the upward revision will be capped by this month\u2019s unrest, Alier said.<\/p>\n
Economists, including Michael Kafe of Barclays Bank Plc, see the riot damage shaving as much as one percentage point off GDP growth this year.<\/p>\n
The country could receive as much as $4.3 billion in new reserves, known as special drawing rights, or SDRs, that the IMF is creating to help its members overcome the devastation wrought by the pandemic, Alier said.<\/p>\n
The IMF gave South Africa a $4.3 billion emergency loan in July last year to assist in fighting the virus.<\/p>\n
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