Market Power, Growth, and Inclusion: The South African Experience

September 25, 2020

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Format: Chicago

Vimal V Thakoor. Market Power, Growth, and Inclusion: The South African Experience, (USA: International Monetary Fund, 2020) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Before the pandemic, the South African economy remained stuck in low gear, with anemic growth, stagnant private investment, and a shrinking tradable sector. Subdued growth has raised unemployment, poverty, and inequality, hindering inclusion efforts. The pandemic has worsened economic and social vulnerabilities. Economic recovery and social inclusion hinge critically on structural reforms to boost competiveness and growth. Product markets represent a cornerstone of the reform strategy. Firms have used their market power to drive up prices and limit competition. Important state-owned monopolies provide low-quality services, while representing a fiscal drag. Existing regulations inhibit the entry of both domestic and foreign firms. Addressing product markets constraints could boost per capita growth by 1 percentage point—adding about 2½ percentage points to headline growth—and foster greater inclusion.

Subject: Commodity markets, Competition, Financial markets, Job creation, Labor, Labor markets, National accounts, Private investment

Keywords: Africa, Commodity markets, Competition, Firm, Firm markup, Global, Growth performance, Job creation, Labor markets, Market concentration, Market power, Market power abuse, Market share, Market structure, Mark-up, Private investment, Product market, Product market reform, Product markets, SMES space, South Africa, South Africa inflation differential, State owned enterprises, Structural reforms, Uncompetitive firm, Value chain, WP

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/206
Stock No:

WPIEA2020206
ISBN:

9781513557731
ISSN:

1018-5941

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