The central bank should target employment when deciding on interest rates, and worry less about inflation when the economy is struggling, a top Congress of South African Trade Unions (Cosatu) official said on Thursday.
Head of policy Chris Malikane also said in an interview with the weekly Financial Mail magazine that the country should rather print money than take on debt.
Malikane -- an economics professor at Johannesburg's Wits University -- said targeting only one variable limited the extent to which the central bank could manage the economy.
"The key variable to include is employment. And to target employment you need the to use the growth rate as an intermediate target."
Malikane said targeting demand to fight inflation did not benefit the poor, as the good they spent money on, such as food and electricity, were influenced by monopolistic behaviour.
Printing money to boost the economy would be a better option than taking on debt -- as the Treasury has announced it will do over then next three years to plug a tax hole.
"Why borrow when we can print money?" he asked.
This, though, should be measured so as not to hurt the economy and done in conjunction with lowering interest rates and weakening the currency.
"But in the process of stimulating the economy, we should make sure we don't overprint. It's better to have 10% inflation and the protection of one million jobs than inflation of 6% and the loss of one million jobs," Malikane said.
full story from M&G here
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