South Africa's economic growth outlook revised from 0.9% to 0.5%
Addressing the 2016 Medium-Term Budget Policy Statement, dubbed the mini budget, Finance Minister Pravin Gordhan announced that the Treasury had revised South Africa's economic growth from 0.9% to 0.5%.
Minister Gordhan delivered the most crucial medium-term budget in his political career.
He said Treasury has revised downwards its economic growth outlook for 2016 to 0.5% from 0.9% and that for 2017 to 1.3% from 1.7%.
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Growth is then expected to improve to 2% in 2018 and 2.2% in 2019.
Economic growth will improve only if SA inspires “the right kind of political context‚ economic stability‚ policy certainty and the right collaborative and partnership approach”‚ Gordhan told a media briefing before delivering his medium-term budget policy statement in Parliament on Wednesday.
The slow pace of finalising policy interventions in areas such as land reform‚ immigration‚ labour relations‚ mining and communications undermined confidence‚ the Treasury said.
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Higher economic growth in coming years will be supported by more reliable electricity supply‚ improved labour relations‚ low inflation‚ a recovery in business and consumer confidence‚ stabilising commodity prices and stronger global growth‚ the department said.
A one percentage point increase in global demand could add as much as 0.3 percentage points to medium-term growth in SA‚ according to the budget policy statement.
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The government was taking steps to improve the policy environment and strengthen policy certainty‚ Gordhan said.
It would also continue investing in infrastructure development to boost growth‚ budgeting R987.4bn for infrastructure over the next three years‚ with large investments continuing in energy‚ transport and telecommunications.