Budget 2023
Share

Nene: Economic growth has deteriorated

Cape Town - Finance Minister Nhlanhla Nene acknowledges in his mini budget that economic growth has deteriorated to the extent  that it might jeopardise fiscal stability. The growth forecast for this year has been lowered to 1.4% from the 2.7% still mentioned in February’s Budget by former Finance Minister Pravin Gordhan.

The growth has deteriorated sharply since a figure of 3.6% has been achieved in 2011.

As has become the custom that better growth figures are given in the mini budget for the coming years; 2.5% for next year and 2.8% for 2016.

The mini budget statement says the improved outlook is supported by investments in energy and transport, a gradual pick-up in global growth, rising exports to the African continent and a recovery in private investment.

Nene wants a shift from the consumer driven growth of the last couple of years to investment driven growth. He says the medium-term strategic framework (five year plan from 2014 tot 2019 that is part of the National Development Plan) prioritises initiatives that will boost investment, including major projects in rail, energy and ports, as well as immigration reform and efforts to improve dispute-resolution mechanisms in the labour relations environment.

These will help change structural constraints to growth in the economy which have become embedded like tightness in electricity supply, labour tensions, skills shortages and transport constraints.

Among critical interventions are getting more private investments for electricity supply; expanding rail capacity for coal exports between Mpumalanga en Richards Bay; enhancing the performance of seaports; exploring on and offshore for oil and gas by developing a drilling plan and legislation; improving dispute-settlement mechanisms in labour relations; and enabling immigration reform to encourage people with skills to work in South Africa.

The world economic outlook is still fragile and uneven with average growth mostly below 4%. The IMF puts the figure this year for advanced economies at 1.8% and for emerging economies at 4.4%. The figure for sub-Saharan Africa is 5.1%.

Inflation in SA is predicted to stay around 6% with food inflation expected tot come down from current levels thanks to buoyant production locally and globally.  It is expected that together with an expected moderation in global oil prices, these forces should partially offset increases in electricity prices.

READ:
Inflation slows to under 6%
Food, oil behind inflation dip - Investec


* Visit Fin24's Mini Budget Special for all the news.




We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.99
-0.2%
Rand - Pound
24.14
-0.1%
Rand - Euro
20.64
-0.2%
Rand - Aus dollar
12.39
+0.2%
Rand - Yen
0.13
+0.5%
Platinum
911.88
-1.3%
Palladium
1,019.74
-4.3%
Gold
2,159.43
-0.1%
Silver
25.10
+0.2%
Brent Crude
86.89
+1.8%
Top 40
66,252
0.0%
All Share
72,431
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders