South Africa's bold economic reform initiative, Operation Vulindlela (OV), is gaining momentum as it enters its second phase. Government officials are promoting significant progress in tackling the deep-rooted issues holding back the country’s economy.

The programme focuses on improving key services like electricity, water, transport, and digital communications, essential building blocks for a strong economy.

The decision by the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) on 31 July to again reduce interest rates by a further 25 basis points (bps) is the right decision for the economy in the present circumstances.

This is the view of Prof Raymond Parsons, economist from the North-West University (NWU) Business School. In commenting on the decision, Prof Parsons says the inflation outlook is now still well within the SARB’s target range and the economy is battling with sluggish gross domestic product (GDP) growth of probably less than 1% this year.

The 30% tariff decision by the United States is not good news for the South African economy, and its potentially negative economic impact should not be underestimated.

Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says while not unexpected, the decision creates a challenging economic headwind for South Africa.

A lively panel of experts provided a critical analysis of Minister Enoch Godongwana's Budget address during the Pitso 2025.4 discussion of the North-West University (NWU) Business School. These experts advocated for significant changes to the way South Africa creates and oversees its national budget, calling for transparency and accountability in policymaking.

The discussion was moderated by columnist Khaya Sithole, and the other speakers were political scientist Prince Mashele and economist Prof Jannie Rossouw from the University of the Witwatersrand.

The disappointing gross domestic product (GDP) growth figure of 0,1% for the first quarter of 2025, released by StasSA on 3 June, comes as no surprise, as it merely confirms several months of muted high-frequency economic data that pointed to this likely outcome.

Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says although adverse global developments earlier this year have also played a role, the weaker economic data was already apparent before then.

The widely anticipated decision by the Monetary Policy Committee (MPC) to resume its interest rate-easing cycle by reducing rates by another 25 basis points (bps) is the right one.

Prof Raymond Parsons, economist of the North-West University (NWU) Business School, says the MPC decision of 29 May is welcome recognition of the changed economic circumstances that have made this possible.

Finance Minister Enoch Godongwana’s revised third Budget is a pragmatic one, given the current circumstances.

This is the view of Prof Raymond Parsons, economist from the North-West University (NWU) Business School. In commenting on the third Budget presented to Parliament on 21 May, Prof Parsons says that, as was stressed by the Finance Minister, various compromises and trade-offs have now been inevitable to achieve a workable balancing of the books that builds confidence.

The 1% rise in the unemployment level in the first quarter of 2025 raises another red flag about South Africa’s weak growth performance.

Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says with the gross domestic product (GDP) growth forecasts for 2025 having been progressively reduced by various institutions and economists to about 1,5% and below, it is not unexpected that this should now be reflected in higher unemployment levels.

The decision by the National Treasury not to increase value-added tax (VAT) on 1 May is the right one in the current circumstances.

Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says after an intensive debate a rise in VAT was eventually seen to be unnecessary, and economically and politically it also failed to command wide support.

The bad news from the latest assessment by the International Monetary Fund (IMF) of the impact of trade wars and policy uncertainty on the world economy is not unexpected. It nonetheless highlights the extent of the economic damage anticipated by recent unbridled United States of America (US) protectionism and its wider consequences.