Gi­gaba up­beat about growth prospects

Pretoria News - - BUSINESS REPORT -

SOUTH Africa’s econ­omy might grow 2 per­cent or more this year if the gov­ern­ment takes the right pol­icy de­ci­sions, Fi­nance Min­is­ter Malusi Gi­gaba said yes­ter­day. “The ca­pac­ity of the South African econ­omy’s growth lev­els far ex­ceeds the tar­gets that we have set our­selves,” Gi­gaba told a busi­ness gath­er­ing in East Lon­don. “We can even grow at more than 2 per­cent.” The coun­try’s econ­omy slipped into re­ces­sion in the first quar­ter of 2017, then re­cov­ered in the next two quar­ters, al­though it is ex­pected to lag a global growth re­cov­ery, mainly be­cause of pol­icy and po­lit­i­cal un­cer­tainty. “…There are cer­tain de­ci­sions we need to take, and if we take them, the econ­omy can ex­ceed our ex­pec­ta­tions this year,” Gi­gaba said. S&P Global Rat­ings cut Pre­to­ria’s lo­cal cur­rency debt to “junk” sta­tus in De­cem­ber, cit­ing a de­te­ri­o­ra­tion in the coun­try’s eco­nomic outlook and public fi­nances. Moody’s placed South Africa on re­view for a down­grade. The down­grades fol­lowed Gi­gaba’s maiden bud­get speech in Oc­to­ber, where he an­nounced a gap much larger than ex­pected in rev­enues and cut the 2018 growth fore­cast to 1.1 per­cent. In the bud­get, Gi­gaba also said the gov­ern­ment was con­sid­er­ing sell­ing its stake in state com­pa­nies to fund bailouts to Eskom and South African Air­ways. Gov­ern­ment bailouts to state firms to­tal about R500 bil­lion. “We need to en­sure that Moody’s does not down­grade us in Fe­bru­ary this year,” Gi­gaba said. – Reuters

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