Loading...
See More

Gordhan: SA likely to miss growth target

Jul 23 2012 11:34 Reuters

Related Articles

Almost half of 1m jobs lost recovered

Marcus: Rate cut right thing to do

May wholesale trade up 8.7%

SA must stay awake

Trade conditions weaken in June

Rate cut may hurt debt levels

 

Johannesburg - South Africa’s economic growth this year is likely to miss the government’s current forecast of 2.7% as a slowdown in the rest of the world hits exports from Africa’s biggest economy, Finance Minister Pravin Gordhan said on Monday.

“We don’t know what the precise numbers are but certainly the current indications are that growth is likely to be below 2.7%,” Gordhan told Reuters on the sidelines of a conference in Johannesburg.

The central bank on Thursday surprisingly cut interest rates by 50 basis points to 5.0% - its first move since the end of 2010 - citing a weakening domestic and global outlook, and trimmed its own growth forecast to 2.7% from 2.9%.

It added that the risks to that projection were on the downside if the economic stagnation in the eurozone, South Africa’s biggest trading partner, intensified.

Gordhan welcomed the move by the bank, which was given a slightly expanded mandate two years ago to take growth and unemployment into account when setting policy, in addition to an inflation target of 3%-6%.

“It was a very appropriate move and a most welcomed one. In 2010, part of the variation of the mandate of the Reserve Bank was a request that they take into account issues of employment and growth.”

Governor Gill Marcus won rare praise from labour unions for lowering rates on Thursday, even though they complained it was “too little, too late”..

Unions have long called for looser monetary policy and a weaker currency to help create jobs in a country where official unemployment runs at 25%.

Some have even demanded the bank be nationalised to change its mandate from inflation-targeting to job creation.

“Clearly given the limitations in respect of fiscal policy options currently, the Reserve Bank has done the absolutely correct thing in line with central banks in many parts of the world,” Gordhan added.

South Africa slid into a recession in 2009 - its first since the end of apartheid 15 years earlier - and the sputtering recovery may throw up some problems for President Jacob Zuma as he seeks re-election as head of the ruling ANC at the end of the year.

 
pravin gordhan  |  sa economy  |  gdp
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
6 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

New forms of digital technology are changing the very ways in which entrepreneurs run their businesses.
 
 

6 life hacks you simply have to know

A few simple tricks can make your life so much easier!

 
 

For chic geeks...

Device lets disabled people talk through their nose
It’s THIS easy for someone to steal your ATM pin!
This is why you should install iOS 8
17 photo illusions that look so real

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...