Gordhan calls for public-private cooperation

2011-10-25 12:46

Both the government and private sector need to invest more into the economy to help the country’s wealth and employment to grow.

“Private sector and government investment have declined since 2007,” said Finance Minister Pravin Gordhan when delivering the Medium Term Budget Policy Statement today.

“This trend must be reversed in the period ahead if more rapid growth and employment creation are to be achieved and sustained,” he said.

Gordhan said the South African gross domestic product (GDP) was expected to grow by 3.1% this year, which is a downward revision from the 3.4% forecast in the this year’s Budget.

The International Monetary Fund has lowered its global growth forecast from 4.5% to 4% in both this year and next year.

He attributed the South African economic slowdown to the Japanese tsunami, domestic strike activity and moderating household consumption.

Europe, Japan and the US account for 44% of total exports and 47% of manufactured exports.

“In the first quarter of 2011, the economy grew at 4.5% on an annual basis. In the second quarter, growth slowed to 1.3%,” said Gordhan.

He predicted that growth would pick up over the medium term as global uncertainty subsides and confidence strengthens.

“South Africa’s GDP growth is projected to reach 3.4% next year, 4.1% in 2013 and 4.3% in 2014,” he said.

Gordhan said fiscal and monetary policy will remain supportive of demand and economic growth over the short term.

“The 2012 medium-term expenditure framework will include a package of measures to support improvements in competitiveness and structural change to help enterprises adjust to new market opportunities, technological advances and a more challenging global environment,” he said.

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