Nhlanhla Nene. Picture: ELMOND JIYANE/GCIS
Nhlanhla Nene. Picture: ELMOND JIYANE/GCIS

The Treasury is likely to have to revise down its growth forecast for 2018, finance minister Nhlanhla Nene says.

Speaking at a conference hosted by the Government Employees Pension Fund (GEPF) on Monday, Nene said: "The outlook for the economy remains fragile. The contraction in GDP growth in the second quarter of 2018 and the downward revision to the first quarter data pose significant downside risks to the Treasury’s projection of 1.5% growth presented in February."

Added to this, dim business confidence, weak activity in the supply-side of the economy and constraints on household spending "will hinder a robust recovery in growth", he said.

In order to make a dent in the unemployment rate which is nearing 30%, SA requires growth of 5%, Nene said.

He assured that the government was implementing as many structural reforms as possible.

The mining charter is expected to be finalised by November while the Integrated Resource Plan for energy is before parliament, he said. Nene also said progress had been made in restoring governance in state-owned entities.

Nene added that the cabinet was putting the final touches to an economic reform package to reignite growth, which would be announced in October.

He said the jobs summit and the investment conference in October would help stimulate the economy, as part of President Cyril Ramaphosa’s bid to raise $100bn worth of investment over the next five years.

"As part of the build-up to the conference, the Presidential investment envoys have been meeting extensively with both local and foreign investors in order to understand the bottlenecks to investment and to commit to efforts, that are co-ordinated across government, to remove them," Nene said.

This comes after data last week confirmed that SA had entered a recession for the first time since the financial crisis.