Gordhan warns of uncertain economical times

By Staff Writer
South Africa's Finance Minister Pravin Gordhan had more bad news for consumers on Wednesday when he said that despite the economy showing plenty of recovery after last year's recession, there are still uncertain times ahead.

The economic growth shown by South Africa in the first quarter of 2010 being higher than expected, the National Treasury and central bank are concerned about the ongoing fiscal woes in Europe and Gordhan is concerned that this could have a negative impact on the country.

"Let us recognise that we do have a very uncertain period ahead of us," Gordhan told parliament.

"There is no guarantees that the revenues will come as we think they will come, or that the economy will sustain the kind of growth indicators that it is giving us at the moment," he said.

Retail spender, which has been the main driver of the economy in previous times, is expected to grow slightly after the recession forced industries to slash roughly one million jobs leaving consumers struggling with debt.

Gordhan, however, insists that the government has set plans to manage its debt - which it had to increase in order to support the country's economy during the recession.

"In South Africa we have a very clear plan... to manage our debt. Let me repeat that the increase in our borrowing wasn't because of our own choice, it was forced upon us and we did it because we wanted to protect programmes of government," he said.

The Finance Minister also insisted that the government had no intention of borrowing endlessly.

"The concerns that we have about debt service costs are valid. We increased from 57 billion rand last year to about 104 billion rand in three years time."

"We require a national consensus among all of us - that we can't just borrow endlessly nor can we spend endlessly on our interest payments," he added.

With such uncertain times ahead, it is vital that consumers who are struggling with debt seek help and those who are not should set up a budget and stick to it with their primary focus being to save money.

Recent Articles

Featured Rating agencies may come knocking

It is only the middle of February, but the rand has already made two big moves. The first was the rand moving from R14.60 to R 13.20 at the beginning of the year, as emerging markets (EM) became fashionable again. The second was where the rand gave away nearly 90 cents in 2 weeks as the EM rally ran out of steam, and local events started to hit the headlines.

Read more

The cost of sending money home to neighbouring countries

Transferring money home within the Southern African Development Community (SADC) provides vital financial support for many households in neighbouring countries.

Read more

Student bank accounts: Which come out on top?

Being a student signals budgeting and not having a lot of money at your disposal. This means streamlining expenses such as your grocery costs and entertainment budget. But what if your bank account is in fact costing you more than you can afford?

Read more

Can you afford an ambulance in South Africa?

When a loved one is straddling the line between life and death, you won’t hesitate to call an ambulance. This week, Justmoney found out how much an ambulance ride costs in South Africa, whether you can refuse to get into an ambulance, and who pays the bill if you’re unconscious. 

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

President Hotel Easter Special

Price: From R1,500
When: 15 March to 30 April
Where: Cape Town

Kulula-Preskil Island Resort Special

Price: R16,999
When: 11 May -14 September
Where: Mauritius

A Touch Of Madness Tuck In Tuesday Special

Price: R70
When: Tuesdays
Where: Cape Town