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Gordhan: SA growth below 3% this year

Jan 26 2012 15:42 Reuters

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Johannesburg - South Africa’s economic growth is “certainly going to be below 3%” this year due to the impact of a slowdown in the eurozone economies, Finance Minister Pravin Gordhan said on Thursday.

“Europe is a factor. Europe as a whole is a major trading partner for South Africa, and for the last 12 to 15 months has had a major impact on our manufacturing industry and other export sectors as well,” he said in a transcript of an interview with CNN in Davos.

The government’s current official growth forecast is 3.4%. Gordhan will release updated forecasts in his February 22 budget.

Gordhan’s Davos comments bring his projections in line with the South African Reserve Bank and the International Monetary Fund, which this month slashed their forecasts to 2.8% and 2.5 % respectively.

The government has said it needs gross domestic product growth of 7.0% to make a dent in unemployment, which stands at a quarter of the labour force.

Gordhan said President Jacob Zuma could announce measures aimed at boosting employment in his February 9 state of the nation address.

“Issues like infrastructure and others are going to play a key part as we go forward,” he said.

 
 
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