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Pretoria - South Africa sees a 60% chance against a global double-dip recession, and is ready to take action to buffer the local economy through managing debt, the budget deficit and providing stimulus, Finance Minister Pravin Gordhan said on Thursday.
South African markets have been battered this week in a wave of global risk aversion due to debt worries in the United States and Europe and some analysts see a possible recession that would also hit SA.
“One of the questions that you might raise is, are we heading for a double-dip? I think our own view at the moment is its 60-40 against a double-dip,” Gordhan told a post-cabinet media briefing.
“There are other people who are saying its now 50-50 depending on the decisiveness with which the rest of the world begins to tackle its problems as well, but let’s wait and see and we’ll keep South Africa informed about what we need to do.”
Gordhan and Reserve Bank Governor Gill Marcus said in a joint statement on Monday they would act to mitigate any financial stability risks after domestic markets tumbled in a sell-off worsened by a U.S. credit downgrade over the weekend.
On Thursday Gordhan said South Africa would take a “growth friendly fiscal consolidation approach” over the next three years and remained committed to cutting its budget deficit as stated in February.
The Treasury forecast a deficit of 5.3% for the 2011/12 fiscal year, narrowing to 4.8% by 2012/13.
South African markets have been battered this week in a wave of global risk aversion due to debt worries in the United States and Europe and some analysts see a possible recession that would also hit SA.
“One of the questions that you might raise is, are we heading for a double-dip? I think our own view at the moment is its 60-40 against a double-dip,” Gordhan told a post-cabinet media briefing.
“There are other people who are saying its now 50-50 depending on the decisiveness with which the rest of the world begins to tackle its problems as well, but let’s wait and see and we’ll keep South Africa informed about what we need to do.”
Gordhan and Reserve Bank Governor Gill Marcus said in a joint statement on Monday they would act to mitigate any financial stability risks after domestic markets tumbled in a sell-off worsened by a U.S. credit downgrade over the weekend.
On Thursday Gordhan said South Africa would take a “growth friendly fiscal consolidation approach” over the next three years and remained committed to cutting its budget deficit as stated in February.
The Treasury forecast a deficit of 5.3% for the 2011/12 fiscal year, narrowing to 4.8% by 2012/13.
