S. African gov't to restore economic growth momentum: minister

The South African cabinet on Thursday reaffirmed the need to intervene strategically and more decisively to restore the momentum of economic growth.

The government will reach out to social partners, particularly business and organised labour, to build consensus on the collective actions required to stabilise the economy, build confidence, raise the level of investment and return South Africa to a path of inclusive economic growth, Minister in the Presidency Jeff Radebe said at a press briefing in Pretoria after a fortnightly cabinet meeting.

The government, he said, will continue to build on the country's diverse economic structure.

Radebe said export earnings continue to depend to a great extent on metals and semi processed raw materials.

The depreciation of the rand over the last few years offers much better prospects for export growth and, combined with a lower global oil price, has helped to relieve pressure on the current account, said Radebe.

However, weaker growth in South Africa's major trading partners has meant subdued demand for South African products abroad, he said.

The fall in commodity prices is unlikely to reverse speedily, sustaining consequences for the South African economy and many of its partners on the African continent.

"The global environment is regarded as particularly challenging for emerging markets, with lower commodity prices and tightening of monetary policy in the U.S., putting pressure on capital flows and growth expectations.

"This has translated into significant volatility in capital markets," Radebe said.

The South African rand, which is amongst the most traded emerging market currencies, has been particularly hard-hit in recent weeks, he said.

The cabinet endorsed stronger measures to restore a sustainable fiscal path, taking account of the weakened outlook for the global economy and its domestic consequence, Radebe said.

The welcomed recovery expected in the U.S. is likely to result in rising global interest rates, while depressed trade volumes and turbulence in global capital markets underscore the need for nations to build resilience and act cautiously in the period ahead, said the minister. Endit