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Finance Minister Pravin Gordhan

He was referring to the 7% economic growth that SA requires to address the current 23.9% unemployment rate.

Gordhan was addressing the Lion of Africa post-Budget breakfast.

On Wednesday the 2012 February Budget Review revised GDP growth lower and consumer inflation higher this year relative to the February 2011 Budget Review in response to a period of exceptional global economic volatility, centred on concerns about sovereign debt levels and financial stability in advanced economies, which has boosted commodity prices and led to a depreciation in the rand in response to increased risk aversion.

Despite the deterioration in the global economic environment last year, the government kept to its October projection of 3.1% GDP growth in 2011 from a 3.4% forecast in the February 2011 Budget. The uncertainty about the Eurozone means that growth for this year is cut to 2.7% in 2012 from 3.4% in October 2011 and 4.1% in February 2011.

Growth in 2013 is projected at 3.6% from 4.1% in October and 4.4% in February 2011. Growth goes back above 4% in 2014 at 4.2%, but this is still lower than the October 2011 forecast of 4.3% and the February 2011 projection of 4.4%.

The Treasury said however that growth at the levels projected, however, remains insufficient for South Africa to meaningfully reduce unemployment and poverty in line with the objectives set out in the New Growth Path.

It has therefore started initiatives aimed at enhancing competitiveness and accelerating economic growth. Measures that broaden access to work opportunities, especially for young people, will enjoy special priority.

The actual consumer inflation was 5.0% in 2011. It is seen increasing to 6.2% (5.4%; 5.2%) in 2012 and 5.3% (5.6%; 5.2%) in 2013.

The Treasury expects GDP inflation to slow to an annual average of 6.1% in 2012 despite the fact that it has been above 7% in the past four years at 8.3% in 2008, 7.7% in 2009, 7.9% in 2010 and 7.2% in 2011.

The government strategy is to boost public sector fixed investment in infrastructure so that it crowds in private sector investment and raises the growth rate to 7% from the 3% level so that five million jobs can be created within ten years.

The Treasury macroeconomic projections are however that only 850,000 jobs will be created over the next three years compared with the 365,000 jobs created in 2011.

Treasury forecasts for the next three years for gross fixed capital formation are also muted at the 4% level rather than the double-digit growth that was achieved in the 2003 to 2008 period when GDP growth exceeded 5%.

Go to Budget 2012 Special Report