IMF Supports South Africa Adopting Lower Inflation Target
- Says nation would gain economic benefits from doing so
- Careful design will be key to minimize potential output costs
South Africa would gain significant economic benefits by adopting a lower inflation target though the process should be carefully managed, according to the International Monetary Fund.
“Shifting from the current target band to a lower point target at an appropriate time could help lower expectations and inflation,” the IMF said Tuesday in its regular update on the country’s economic health. “Careful design and gradual implementation will be key to minimize potential near-term output costs.”