Finance Minister to brief on economy

Thursday, June 8, 2017

Pretoria - Finance Minister Malusi Gigaba is set to brief the media on issues related to the economy.

“Cabinet endorsed a full media briefing by the Minister of Finance to share with South Africans the interventions government will embark upon within the current budget framework. Cabinet further reaffirms the adopted budget framework for the country,” Communications Minister Ayanda Dlodlo said on Thursday.

Briefing reporters following Cabinet’s fortnightly meeting in Cape Town, the Minister said the media briefing would be held on Sunday, 11 June.

Gross domestic product (GDP) figures released by Statistics South Africa (Stats SA) for the first quarter of 2017 showed a contraction of 0.7%.

On Thursday, Minister Dlodlo said Cabinet was briefed by Minister Gigaba on the GDP figures.

The worse than expected 0.7% contraction in the first quarter of 2017 is significantly lower than the 2017 Budget Review, which projected 2017 GDP growth at 1.3%.

This has been attributed to, among other things, the contraction of the manufacturing, trade, catering and accommodation industries.

The economy was nevertheless supported by growth in the mining and quarrying industry, which increased by 12.8%

The agriculture, forestry and fishing industry rebounded in the first quarter, with an increase of 22.2%.

There are green shoots that the country can leverage to boost its own economic growth outlook, Minister Dlodlo said.

These include improving global growth, stabilising commodity prices, more favourable climate conditions, reliable electricity supply and less volatile labour relations.

“As a matter of urgency, Cabinet calls on business, labour and the broader society to partner with government to intensify our growth programme and improve confidence so as to arrest the decline and set the economy on a higher trajectory to achieve inclusive economic growth,”  said Minister Dlodlo.

Earlier this week, National Treasury announced that Minister Gigaba will meet with business leaders in a bid to formulate strategies to counter economic recession and achieve inclusive growth.

Rating agencies

Minister Dlodlo reiterated that rating agencies Fitch and Standard & Poor’s affirmed South Africa’s long-term foreign currency debt ratings of ‘BB+’.

“This comes amid Minister Gigaba’s engagements with the private sector to ensure that the joint work of government, business, labour and civil society continues, and that the pledges made are fulfilled,” said Minister Dlodlo.

Last week, Fitch affirmed the country’s debt rating with a stable outlook. At the time, National Treasury said the outcome demonstrates that South Africans must continue to act in unison in order to return the country to investment grade status.

“Cabinet reiterates that South Africans must continue to act in unison, especially during difficult times and work even harder to ensure that the country reclaims its investment grade status,” said Minister Dlodlo.

Unemployment challenge

Cabinet on Thursday reaffirmed its commitment to continue partnering with the private sector and labour in its attempts to address the country’s unemployment challenges.

Stats SA last Thursday released results of the Quarterly Labour Force Survey (QLFS) for the first quarter of 2017.

Cabinet said it had noted that the QLFS had shown that the economy added 144 000 jobs. These numbers were offset by an increase in the number of job seekers by 433 00 people. The data showed that South Africa’s unemployment rate rose to 27.7 %.

“Cabinet reaffirms its commitment to continue partnering with the private sector and labour in its attempts to address the country’s unemployment challenges,” said Minister Dlodlo. – SAnews.gov.za

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