The ANC Youth League (ANCYL) has lauded the recent drop in annual headline inflation announced by Statistics SA on Wednesday.
According to Stats SA, consumer inflation has reached its lowest level in two years, hitting 4.7% in July from 5.4% in June.
With the Reserve Bank aiming for inflation within 3% to 6%, the recent drop in consumer inflation supports a case for the suspension of interest rate hikes.
In a statement on Thursday, the ANCYL expressed gratitude for efforts undertaken to achieve a drop and said it hopes the trend will alleviate economic pressures.
However, the young lions raised concern about existing monetary policy tools in place, which it believes do not align effectively with the country’s developmental aspirations.
The league cited issues related to employment generation and sustainable economic growth, asserting that the current macroeconomic framework requires a radical transformation to address these critical challenges.
“Inflation targeting remains the neoliberal tool in the hands of our monetary policy authorities. As such, our national sociopolitical interests are consistently forgone in favour of inherent limits of neoliberal macroeconomic frameworks.
“The consistent relegation of our sociopolitical interests makes it unlikely for the resolution of social and economic ills that afflict our society,” the ANCYL remarked.
Central to the league’s concerns is the belief that the central bank’s focus on inflation targeting should shift towards an emphasis on creating decent employment opportunities and achieving sustainable economic growth.
“The creation of decent employment, as well as the achievement of sustainable economic growth should be at the helm of our monetary policy priorities. This can only be attained through aggressive industrialisation and beneficiation.
“South Africa is not merely faced with a cyclical economic crisis but rather a structural one. Failure to adequately address the systemic crisis will hinder and reverse our recently recorded economic milestone.
“The ANCYL is convinced that more work is required to protect the gains made under these difficult circumstances, so that we can carry out sustainable national development towards an equal, prosperous, non-racial, and non-sexist society as envisioned by the National Democratic Revolution.”
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