core sector communique

Statement by IMF Managing Director Christine Lagarde at the Conclusion of her Visit to South Africa

January 7, 2012

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), made the following statement today in Pretoria:

“It is a great pleasure to be in South Africa for my first visit as Managing Director of the IMF. I had the privilege to meet President Jacob Zuma, and had very productive meetings with Finance Minister Pravin Gordhan, Minister in the Presidency in charge of the National Planning Commission Trevor Manuel, and Central Bank Governor Gill Marcus.

“South Africa’s recent economic performance has been impressive. Good macroeconomic policies which, together with a flexible exchange rate and sound financial sector, have mitigated the output drop during the global recession. 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.

“South Africa has become increasingly integrated into the global economy. In our highly interconnected world, this integration also exposes South Africa to global business cycles. The ongoing difficulties in the euro area, one of South Africa’s main export markets, present significant downside risks to the 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.

“In these difficult times for the global economy, emerging economies are a key part of the solution. 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 G-20, it has a leadership role to play in making the voice of Africa heard. I’m confident that it will continue to do so.”