Annual meetings of the International Monetary Fund still attract my attention because in the “bad old days”, it was the only global financial conference where South Africans was still welcomed. So for young financial journalists like me, the IMF (two successive years in Washington; next year elsewhere) was one of the few “trips” to aim at.
Since 1994 those in my profession – and by definition the readers we serve – are spoilt for choice in the global conference arena. So traipsing after boring central bankers and bureaucrats to their annual jubilee is near the bottom an annual list of things to do. But that doesn’t mean the IMF is all boring cocktail chatter. It still throws up the occasional nugget .
Like yesterday when the highlight of proceedings from Lima in Peru (it’s an “elsewhere” year) was contained in updated economic forecasts. Unfortunately, there was bad news for South Africa. The IMF has dropped its 2015 economic growth forecast for the country from 2% to 1.4%. And for next year, from an estimate of 2.1% to just 1.3%.
SA’s gross domestic product is around R4.3 trillion. Put in terms we can get closer to understanding, the IMF’s adjustment means R26bn of expected economic growth will go missing this year; with another R34bn disappearing for 2016. That’s a R60bn reverse from what was expected a few months ago. Clearly, applying well intentioned but unworkable economic policies are a costly business. If you thought education for those pulling the levers of power was expensive, try ignorance.