Bloomberg News

South African 7% Growth Goal Hurt by Global Slump, Gordhan Says

October 05, 2011

Oct. 5 (Bloomberg) -- South Africa’s economic growth target of 7 percent may be difficult to achieve as global growth slows, the National Treasury said, clarifying comments made by Finance Minister Pravin Gordhan earlier this week.

The “current unpredictable macroeconomic environment” may undermine the government’s goal for the economy to expand 7 percent a year over the next decade to create 5 million jobs, the Pretoria-based Treasury said in an e-mailed statement today.

Gordhan said in a speech on Oct. 3 that the government’s February forecast that the economy will expand 4 percent annually over the next three years was “far too ambitious.” Today, the Treasury said in its statement that this may have created the impression that its estimates are “way outside the general consensus forecasts.”

The Treasury’s projections “have been in most instances in line with market forecasts, despite the difficult forecasting environment,” according to the statement.

The economy may expand 3.3 percent this year and 3.7 percent in 2012, according to the median forecast of 16 economists in a Bloomberg survey. The International Monetary Fund estimates growth of 3.4 percent and 3.6 percent for the same period.

Gordhan is scheduled to give updated growth estimates in his mid-term budget on Oct. 25 in Cape Town.

--Editors: Nasreen Seria, Heather Langan

To contact the reporter on this story: Andres R. Martinez in Johannesburg at amartinez28@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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