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.

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