The problem is that we have a public sector banking crisis very similar to the one experienced by India in the early 2010s which the country has never recovered from. We also have to cut down energy subsidies and liberalise exchange rates as part of the IMF reforms. You can't go through with these reforms with a political mandate.
It's not all doom and gloom. Our public sector banks are less dominant than India's banking sector. Digital technologies is all enabling private banks to expand into rural credit markets.
Energy prices should be in long term decline in coming years softening the blow from reduced subsidy.
The government was already in the process of liberalising the exchange rate. Major economies are in the process of reducing their interest rates while our central bank is entering a tightening cycle. This should reduce the pressure on our exchange rate.
However, the interim administration manages to stabilise the economy it might create a culture of military coups to solve political challenges.
The problem is that we have a public sector banking crisis very similar to the one experienced by India in the early 2010s which the country has never recovered from. We also have to cut down energy subsidies and liberalise exchange rates as part of the IMF reforms. You can't go through with these reforms with a political mandate.
It's not all doom and gloom. Our public sector banks are less dominant than India's banking sector. Digital technologies is all enabling private banks to expand into rural credit markets.
Energy prices should be in long term decline in coming years softening the blow from reduced subsidy.
The government was already in the process of liberalising the exchange rate. Major economies are in the process of reducing their interest rates while our central bank is entering a tightening cycle. This should reduce the pressure on our exchange rate.
However, the interim administration manages to stabilise the economy it might create a culture of military coups to solve political challenges.