Pretoria - Government is to consider the Organisation for Economic Co-operation and Development (OECD) report on South Africa that among others highlights the country's high unemployment rate.
"We welcome the survey," said Finance Minister Pravin Gordhan, of the OECD's first economic survey report released on Monday. The minister added that the report would add another voice to economic debate.
"We find it useful that we have another voice and set of minds that have applied themselves to South Africa's context," said the minister.
According to the report, South Africa's economy needs to grow by 5 percent a year in order to turn the tide against unemployment which is "especially acute for the young".
It said that the economy was still around 3 percent below potential and will take at least three years before reaching potential.
Minister Gordhan said that a growth rate of over 6 percent is necessary to turn the tide on job creation and poverty.
"What we need is 7 percent growth for 20 years," he said. Gordhan said that Treasury will allow the Reserve Bank to buy reserves in response to the OECD's proposal that South Africa intervene more actively on the rand.
"We have consistently said that we want a stable exchange rate. We will enable the Reserve Bank to buy more reserves. As a society we should keep inflation under control and at the same time the Reserve Bank has a more flexible mandate when determining interest rate decisions," he said.
Secretary General of the OECD Angel Gurria said the country's low employment rate is South Africa's most salient economic problem.
"Many supply and demand side factors have contributed with the mediocre growth performance being perhaps the most important factor. Increasing trend growth is thus key to raising employment rates," said the secretary general.
Statistics South Africa's Quarterly Labour Force survey showed that in the third quarter of 2009, 24.5 percent of people were jobless.
Gurria said reforms to the wage determination process could also help the country.
The OECD report also added that the FIFA World Cup tournament which ended on 11 July has earned the country a lot of respect.
"The World Cup has earned South Africa a lot of respect and this will being business opportunities and hopefully will open markets," said Gurria. South Africa hosted the first African soil World Cup from11 June to 11 July which saw Spain being crowned champions.
The OECD helps governments to compare policy experiences, to seek answers to common problems, identify good practice and co-ordinate domestic and international policies
