Pravin Gordhan. Picture:  GCIS
Pravin Gordhan. Picture: GCIS

THE International Monetary Fund (IMF) has welcomed SA’s budget tabled in February.

"We think the 2016 budget was prudent and charted appropriately ambitious targets for the government deficit and debt," IMF communications department director Gerry Rice said.

In his speech on February 24 Finance Minister Pravin Gordhan announced tax increases and a reduction in the spending ceiling, which would result in a narrowing in the budget deficit. Social spending, such as on social grants, would be increased.

"We welcome the budget’s focus on improving the efficiency of spending and on containing the wage bill while protecting the most vulnerable by shielding social grants and reprioritising some spending to provide funding to new priorities such as the drought," Mr Rice said.

The IMF again highlighted the importance of structural reform to support economic growth and create jobs. Reforms proposed in the past include improving the quality of education, developing skills and tackling stringent labour laws.