Economic policy and aggregate outcomes in South Africa and selected Latin American countries, 1994–2024 (WP/25/22)

Economic policy and aggregate outcomes: SA and Latin America With the exception of Venezuela, which has suffered economic collapse and protracted hyperinflation since 2016, these countries have largely converged in their macroeconomic policies to a similar mix as in South Africa – inflation targeting, an independent central bank and a floating exchange rate. And, again with the exception of Venezuela, these countries have pursued liberalisation in their microeconomic policies. There is strong evidence that these reforms have improved productivity. While there have been some crises in the last three decades, the 1970s and 1980s were considerably worse. The remaining policy lessons to be learned for South Africa involve the importance of fiscal discipline and avoiding poor design of quasi-fiscal institutions.