Finance Minister Pravin Gordhan says that South Africa’s economy will not slip into recession, however it needs to make tough decisions about how it runs its finances.<\/p>\n
Gordhan’s comments contradict those of economists who have said that sharp falls in the rand pointed to a contraction in 2016.<\/p>\n
“We are growing as an economy, we are not going into a recession. But we are not growing fast enough,” Gordhan told a media briefing after a cabinet meeting.<\/p>\n
The rand, among the most volatile of major emerging market currencies, slumped to a record low of R17.9950 to the dollar during Asian trade on Monday on fears that China wanted to weaken its currency aggressively, though it has since recovered some ground.<\/p>\n
The depreciation has, however, helped SA\u2019s export prospects and, combined with a sharply lower global oil price, has helped to alleviate pressure on South Africa’s current account.<\/p>\n
Gordhan, who returned as finance minister in December, said he would be meeting with the Reserve Bank to discuss how to deal with the challenges of growth.<\/p>\n
In 2010, Gordhan wrote a letter to then-Reserve Bank governor Gill Marcus asking the Reserve Bank to be mindful of employment and growth alongside its price stability and inflation mandate.<\/p>\n
“We will certainly be meeting regularly with the Reserve Bank and look at the current environment to see how we approach challenges,” Gordhan said.<\/p>\n
The National Treasury has set a growth target of 1.5% for 2015, though quarterly data suggest this may be hard to achieve.<\/p>\n
“We’ll have to make some tough decisions about how we run the finances of the country,” Gordhan told 702 Talk Radio. “I can assure you that we are working together on a budget that is credible and can inspire confidence in our country.”<\/p>\n
In morning trade on Friday, the rand traded at R16.52 against the dollar.<\/span><\/p>\n Market slide not Zuma\u2019s fault \u2013 Gordhan<\/a><\/strong><\/p>\n Economists can\u2019t convince me I was wrong: Zuma<\/a><\/strong><\/p>\n Everyone overreacted to Nene\u2019s axing: Zuma<\/strong><\/a><\/p>\nFin24<\/a><\/h3>\n
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