SA not worst off in global crisis

Wednesday, March 25, 2009

Johannesburg - As many countries in the world flounder with the effects of the global financial crisis, South Africa is not performing too badly, says Finance Minister Trevor Manuel.

The United States showed an increased in the budget deficit from 2.4 percent in 2008 to 13.7 percent in 2009. In Britain the budget deficit increased from 3.2 percent to 11.3 percent over the same period.

South Africa Gross Domestic Product declined by 1.8 percent year on year in the fourth quarter of last year.

"In the face of all this, South Africa may not be doing too badly. However, while our economy may not be deteriorating at a rate as intense as so many other countries, we continue to monitor signs carefully," said Mr Manuel.

He said the consequences of the global economic crisis were being felt in all sectors and this had a domino effect.

"When global automobile production decreases, the factory in the Eastern Cape making catalytic converters for cars is affected and so is the mine in Rustenburg producing platinum for the converters.

"The worker in the factory and the miner in Rustenburg are now without work and the woman who runs the little vegetable stall outside the mine is making less money each week. Their families, all of them, face a future made more precarious by the vagaries of global finance," the minister explained.

He said the key global challenge was extricating the economy from hostile waters.

"For now, we should concentrate on the monumental and collective effort to get the global economy out of its current hostile environs," said Mr Manuel.