SA economy expanding: Manuel
Seshoane Masitha
27 October 2004
Finance Minister Trevor Manuel says reforms implemented over the past decade are bearing fruit with regard to the country's expanding economy.
"Sound fiscal policy and the introduction of inflation targeting have contributed to low interest rates, and a buoyant property market.
"The trade reforms implemented during the 1990s mean that we are able to penetrate a range of international markets with a diverse array of products.
"Eight years ago, the current account deficit (the difference between our imports and exports) was seen as a binding constraint to higher growth.
"Today, the capital inflows and the resilience of the economy show that our economy can grow faster and can finance a higher current account deficit."
Manuel was addressing the media shortly before tabling the Medium Term Budget Policy Statement in Parliament on Tuesday.
The 2004 MTBPS outlines economic trends, fiscal parameters, revenue
considerations and spending plans that will inform next year's budget that is scheduled to be tabled in February.
"Today the economy is expanding in a much more balanced fashion, investment is growing across a wide range of sectors, manufacturing is recovering strongly, the housing boom has contributed to an upswing in construction and the services sector continues to expand steadily.
"Inflation is firmly within the target range and the low interest environment should last into 2005 and beyond," the minister said.
He also said the projected budget deficit for next year remained at 3.5 percent.
"We are looking at changing tax laws. The message about the economy is that it is strong, inflation is low, interest rates have gone down, investments are up and the GDP is higher," said Manuel.
He added that government was satisfied with the 3.6 percent of GDP spent for servicing the country's debt.
Manuel voiced concerns at the current growth on
social grants spending, which he said would erode government's capacity to deliver on its other core responsibilities.
"Social security transfers are higher, we have put in place processes to deal with that," he said, adding that the Social Development department ought to ensure that people eligible for grants received them.
"We should be encouraging the department of social services to go out to rural areas, to look for people who are entitled to grants but were not getting them," he said.
He said the number of child support grant beneficiaries grew by 32 percent for the 2002/2003 financial year.
Asked about government's policy on HIV/AIDS spending and the rollout of anti-retroviral drugs, the minister said government's long-term goal was to ensure that there was medical infrastructure across the country.
"This means testing, giving psychological support to HIV positive patients and good investment in education and nutrition," he
said.
Source: BuaNews
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