Malusi Gigaba warns that SA’s already-dismal growth forecast is at risk
National Treasury’s growth forecast of 1.3% for 2017 may be at risk, according to Finance Minister Malusi Gigaba.
Speaking at the Tax Indaba in Sandton on Monday, Gigaba said he was sure positive growth would materialise in the coming quarters. However, he said growth was at risk of falling short of the forecast and that a revised outlook could be announced during the medium-term budget policy statement on October 25.
In the February budget review, Treasury forecast that the economy would grow 1.3% in 2017, 2% in 2018 and 2.2% in 2019. Annual growth has weakened since 2011, which has hampered the government’s ability to reduce unemployment.
Speaking on gross domestic product (GDP) growth in the second quarter, which was 2.5% quarter on quarter and 1.1% year on year, Gigaba said there was broad-based weakness in the industrial and services sectors but the improvement in second quarter was promising.
"The most important step we can take to develop the country is to get South Africans working. We welcome initiatives from [the] CEO Initiative and Business Unity SA to grow the economy inclusively."
Gigaba said he would focus on the 14-point plan announced in June to bolster growth.
"Although the second-quarter GDP growth came as a relief to all of us.… Our current level of growth is clearly insufficient and unsustainable. We simply have to take drastic measure to grow the economy sustainably."
Giagaba said taxation remained crucial and at the core of SA’s democracy, allowing the state to provide public services.
"Government bears the responsibility to manage public finances prudently and effectively," he said.
He said due to below-par growth in the past few years, there had been greater public interest in tax policy.
South African Revenue Service (SARS) commissioner Tom Moyane said the revenue target for 2017 remained a huge stretch in an economy with weak growth.
"The role of SARS as a tax organisation becomes even more significant with low economic growth but SARS remains committed to its mandate of collecting all its revenue for 2017."