Economic growth ‘just unacceptable’, says Gordhan. By Craig Dodds
NOW that the country had dodged the credit rating downgrade it was time to knuckle down and put a “universal focus” on lifting economic growth, Finance Minister Pravin Gordhan said yesterday.
This was not about satisfying ratings agencies but was “necessary whether we are about to be downgraded to junk or not”, he said, responding to rumbles of discontent in some quarters over the appearance the government was being forced to bow to the interests of foreign investors.
Growth of 0.6 percent or 0.7 percent was “just unacceptable”, as were the low levels of job creation and the loss of jobs.
Failing to achieve the right levels of investment in infrastructure and the real economy was also putting the future at risk.
“What we’re looking at is not just for ratings agencies, it’s for the benefit of (the whole country) now and future generations, to ensure we remove hurdles and that we actually build a more positive narrative as we go forward.”
Responding to Standard & Poor’s concerns that rising political tensions ahead of the elections and the ANC’s leadership race could hamper implementation of reforms and damage the social compact between the government, labour and business, Gordhan said there would always be political debate and noise in any country.
“Look at what Brexit is doing to the UK. We need to be mindful of how we conduct our politics and not shoot ourselves in the foot.”
Referring to S&P’s concerns about the adverse effects of low growth – which it saw at 0.6 percent this year and 1.6 percent in 2017 – and the need for promised reforms to be implemented to turn the economy around, Gordhan said this meant the country needed to shift the focus from avoiding a downgrade and concentrate on what it required to grow the economy.
Higher growth would “change the denominator” in a number of key ratios, including debt-to-gross domestic product and the current account and budget deficits.
Gordhan said while it wasn’t possible to produce growth “at the click of a finger”, South Africa could demonstrate that the right