Government to cut its costs

FINANCE Minister Malusi Gigaba has promised to stick to fiscal consolidation – while the country has slipped into a recession.

Gigaba told Parliament yesterday that departments will have to do with less and that he would continue with cost-cutting measures over the next few years.

He conceded, however, that the contraction of the economy by 0.7% in the first quarter was a setback.

This was the second quarter in a row of negative growth. In the fourth quarter of last year, the economy had shrunk by 0.3% .

Gigaba, who was addressing the House during the approval of the Appropriations Bill, said these were tough times for South Africa.

The country’s projected growth has been revised by the World Bank from 1.1% to 0.6% this year.

But the minister urged South Africans not to be despondent.

The government was committed to re-igniting growth.

It had projected growth of 1.3% this year.

Despite the challenges, the government would have to respond to the recession and arrest the situation.

Gigaba said the government would soon give details on policy to provide market certainty.