SA’s sees faster economic growth

JOHANNESBURG – South Africa’s economy can achieve and maintain growth of more than six per cent, with portfolio inflows sustainable and no constraint from the balance of payments, a top Treasury official said on Friday.

“We are on the right track, we have no doubt that this economy has the ability to sustain growth of six percent plus”, National Treasury Director General Lesetja Kganyago told a business breakfast. The government wants to raise growth in Africa’s largest economy to six per cent by 2010 from around four per cent now as part of a strategy to halve poverty and reduce steep unemployment seen as a scourge behind a host of social ills.The economy grew 3,7 per cent in 2004 and is expected to expand by 4,4 per cent this year.Kganyago said the government had identified six constraints that could hamper its plans to accelerate growth, among them a skills shortage and the regulatory environment.”The volatility of the currency cannot be good for business planning, but is it a binding constraint? We have got to test that,” he said.The rand currency’s surge from a historic low of 13,85/US dollar in 2001 has eroded earnings and export growth in South Africa’s key mining and manufacturing sectors, prompting job cuts and calls for policies that would weaken it.So far this year, it has depreciated about 13,8 per cent against the dollar, making a small dent into three years of hefty gains.Kganyago said the currency’s volatility had declined, adding that this should be further assisted by the central bank’s gradual accumulation of foreign exchange reserves.-Nampa-ReutersThe government wants to raise growth in Africa’s largest economy to six per cent by 2010 from around four per cent now as part of a strategy to halve poverty and reduce steep unemployment seen as a scourge behind a host of social ills.The economy grew 3,7 per cent in 2004 and is expected to expand by 4,4 per cent this year.Kganyago said the government had identified six constraints that could hamper its plans to accelerate growth, among them a skills shortage and the regulatory environment.”The volatility of the currency cannot be good for business planning, but is it a binding constraint? We have got to test that,” he said.The rand currency’s surge from a historic low of 13,85/US dollar in 2001 has eroded earnings and export growth in South Africa’s key mining and manufacturing sectors, prompting job cuts and calls for policies that would weaken it.So far this year, it has depreciated about 13,8 per cent against the dollar, making a small dent into three years of hefty gains.Kganyago said the currency’s volatility had declined, adding that this should be further assisted by the central bank’s gradual accumulation of foreign exchange reserves.-Nampa-Reuters