Pretoria - Director-General of the National Treasury, Lesetja Kganyago, said in reaction to news of South Africa's first recession since 1992 that it needs to be seen in the context of the world economy contraction of 1.3%, but that the economic storm is more ferocious than initially thought.

"As a country we took decisions earlier to cushion the economy, but the storm is more ferocious than initially thought," he said.

New finance minister Pravin Gordhan was due to speak together with his deputy, but they could not attend the conference due to existing commitments at the cabinet lekgotla.

Added Kganyago: "We are less bad than we would otherwise have been had we not done anything."

He also noted that there were some tentative signs of improvement in the world economy.

He pointed out that capital flows were resuming to emerging markets via flows into bonds and equities.

He said that a combination of "good timing" and "good credit standing" had just enabled South Africa to raise $1.5bn on offshore capital markets.

"Our slowdown is less severe than in most countries," said Kganyago.

"The good news is we are not alone," he said.

"The impact of the global slowdown is less severe than in other countries," he concluded.

- I-Net Bridge