The Democratic Alliance (DA) says Finance Minister Pravin Gordhan will have to provide strong leadership on the country’s economic direction when he makes his Medium Term Budget Policy Statement in the National Assembly on Thursday.
The DA’s finance spokesperson, Tim Harris, has accused government of sending mixed signals on its economic policies. He says Gordhan needs to send a strong signal that debt will not be allowed to rise to unsustainable levels and that wasteful spending will be cut.
According to Harris, key indicators of a struggling South African economy, include:
• A projected budget deficit of 5.2% for the 2012/13 financial year.• Government debt approaching 40% of GDP.• A current account deficit of R168.78 billion; and• First round effects of the recent mining and transport strikes are estimated to have cost national revenue collectors in the region of R2.5 billion.
Harris says Gordhan must show investors that he has a firm hand on the tiller: “He is the minister with the plan that will be implemented.”
Analysts have generally predicted that Gordhan will respond decisively to issues relating to international investor jitters in light of violent labour unrest in the country, as well as a recent credit downgrading.
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