President’s move is practical for building the economy, prioritises human impact
CAPE TOWN – The Johannesburg Stock Exchange (JSE) on Wednesday applauded President Cyril Ramaphosa’s fiscal stimulus to the economy, as the country continues to battle the impact of Covid-19.
On Tuesday President Cyril Ramaphosa announced a social relief and economic support package of R500 billion, which amounts to 10 percent of gross domestic product (GDP). R50 billion of this will be directed towards relieving the plight of the unemployed and current grant beneficiaries, through a multi-pronged approach.
The JSE said it believed that the well timed announcement would balance the country’s fiscal challenges with the need for stimulation and growth in the economy. It said government’s R500 billion stimulus package, was a clear indication of the government’s commitment to stimulating the economy while prioritising the fight against Covid-19.
The JSE believes that the additional measures mentioned in the stimulus package will be constructive in enhancing both consumer and business confidence through economic and structural mechanisms, including tax reforms, increased grant funding to SME’s and loan facilities raised through a collaboration with major banks.
JSE group chief executive, Leila Fourie said the breadth of coverage of the fiscal stimulus across a multitude of sectors was practical for both building our economy and prioritising the human impact.
“It is comprehensive and drives medium-term growth. This move will create a stronger base on which to foster growth and driving better ease of business. What will be crucial now is the administration and surety that funds will reach intended recipients and provide relief to our most vulnerable businesses and citizens of our country,” said Fourie.
The JSE said it was keenly aware that this stimulus came on the back of a challenged fiscal deficit, compounded by the country’s recent ratings downgrade.