19 Febuary 2004

South Africa's economy is in a much better position to take advantage of the emerging global upturn, despite concerns about the volatility of the exchange rate, says Finance Minister Trevor Manuel.

Delivering his 2004/05 Budget speech in Cape Town on Wednesday, Manuel said that with a sound macro-economic and fiscal framework in place, the country could focus on streamlining the economy, encouraging investment, addressing barriers to business development, and creating jobs.

"A healthier balance of payments position means that faster growth can be sustained without the boom-bust cycles of the past", Manuel said. "An inflation-targeting framework has assisted in anchoring price expectations, while making monetary policy more transparent.

"Wide-ranging reforms have reduced the vulnerability of the fiscus, and we have a well regulated financial system that has enabled the economy to withstand several shocks to the international financial system over the past decade."

Manuel said the projected budget deficit for 2004/05 was 3.1% of GDP, and that consumer inflation should average 4.8% and remain firmly within the Reserve Bank's targeted range of three to six percent over the medium term. Consumer inflation stands now at 4%, from a peak of 11.3% in October 2002.

Economic growth is projected at 2.9% this year, accelerating to 3.6% and 4% over the next two years.

All this, the minister said, would enable the government to increase its social spending and infrastructure investment.

"Our achievements are not mere statistics", Manuel told Parliament. "They tell a story of fundamental transformation, on which we look back with pride. We can celebrate the many ways in which we have pushed back the tide of poverty, pushed forward the frontiers of our freedom and humanity.

"We will continue day by day and year by year to translate the resources at our disposal and opportunities before us into people-centred development, human fulfilment and freedom."

Source: BuaNews

	South Africa Inc. – 10 years on Treasury advances growth Well-regulated economy

	National Budget 2004  Budget breakdown: Grant Thornton  National Treasury

BUDGET 2004/05 R4bn in tax relief Economy ready to grow: Manuel Budgeting for social delivery R15bn for infrastructure projects R1.9bn more for policing, justice Extra R1bn for higher education

MEDIUM TERM BUDGET 2003-06 SA a great place to be: Manuel SA budgets R12bn to fight Aids R3bn for higher education revamp More money for social grants Manuel commends Reserve Bank