South African Reserve Bank publishes working paper comparing South Africa and Latin America’s macro policy outcomes and highlighting fiscal discipline lessons

The South African Reserve Bank has published a Working Paper by Jesse Naidoo comparing macroeconomic policies and aggregate outcomes in South Africa and four Latin American countries (Brazil, Chile, Mexico and Venezuela) over 1994–2024. The paper finds that, except for Venezuela, these countries have largely converged on a similar macroeconomic policy mix to South Africa, combining inflation targeting, an independent central bank and a floating exchange rate, alongside broadly liberalised microeconomic policies. The analysis points to strong evidence that these reforms improved productivity and helped avoid the more severe instability experienced in the 1970s and 1980s, while using crisis episodes to illustrate vulnerabilities linked to fixed or managed exchange rates and poorly aligned policy frameworks. For South Africa, the paper frames the remaining policy lessons as the need for credible fiscal discipline and the importance of avoiding weakly designed quasi-fiscal institutions, drawing cautionary parallels from Latin American experiences. The publication is released as externally refereed, preliminary research intended to elicit comments and stimulate debate, and does not represent South African Reserve Bank policy.