Off the wire
• Iranian soccer league standings  • China Focus: Migration adds to elderly-care woes  • 1st LD: China to build global comprehensive strategic partnership with Britain: Xi  • Russia, Belarus to form joint military bloc  • Russian, U.S. FMs to meet on Syria  • China's economic downturn "vastly overstated": report  • Spain's unemployment to fall by 650,000 people this year  • Iranian soccer league results  • Improved tax policies to promote innovation, entrepreneurship  • Xinhua world news summary at 1530 GMT, Oct. 21  
You are here: 　 Home

S. African economic growth revised down to 1.5 pct

Xinhua, October 22, 2015 Adjust font size:

South Africa's economy will grow at about 1.5 percent this year, rising marginally to 1.7 percent next year, Finance Minister Nhlanhla Nene said on Wednesday in Parliament.

"This is considerably lower than at the time of the February budget, when we envisaged 2 percent this year and 2.4 percent in 2016," the minister said in his 2015 Medium Term Budget Policy Statement (MTBPS).

The IMF also projects a decline in growth next year, he said.

Nene cited electricity supply constraints, falling commodity prices and lower confidence levels as the major factors that resulted in the growth forecasts being revised lower.

Investment growth will be just 1.2 percent this year, while consumption will be held back by limited employment growth and household income constraints, said Nene.

Exports have grown strongly this year, a welcome recovery after setbacks in mining and manufacturing last year, according to Nene.

Although exports have grown faster than imports since 2012, the current account deficit on the balance of payments is still a sizeable 4.1 percent of GDP this year, he said.

Consumer price inflation has declined from 6.1 percent in 2014 to a projected 4.8 percent this year. Higher food prices and the weakening of the rand are expected to contribute to a rebound in inflation to around 6 percent a year over the period ahead, he said.

"Financial market volatility is high and capital inflows into emerging markets have slowed. This has raised borrowing rates for emerging markets globally," Nene said.

"Growth is considerably lower in our economy than we projected in February. This is in part a consequence of the global slowdown, but it also reflects our energy constraint and structural weaknesses in our economy," the minister said.

"In these challenging circumstances, we have had to revise our revenue estimates down for the period ahead," he added.

Nene stressed the need to take bold action to restore the momentum of growth.

There must be policy certainty, confidence and trust, shared between the government, business, workers and households, Nene said. Enditem