South Africa’s finance Minister Pravin Gordhan has countered reports that the country’s economy would not slip into recession and rejected predictions by some economists that sharp falls in the rand pointed to a contraction this year.
“We are growing as an economy, we are not going into a recession. But we are not growing fast enough,” Gordhan told a media briefing after a cabinet meeting.
The rand, among the most volatile of major emerging market currencies, slumped to a record low of 17.99 to the dollar during Asian trade on Monday on fears that China wanted to weaken its currency aggressively, though it has since recovered some ground.
We are growing as an economy, we are not going into a recession. But we are not growing fast enough
The depreciation has, however, helped the export prospects of Africa’s most developed economy and, combined with a sharply lower global oil price, has helped to alleviate pressure on South Africa’s current account.
Gordhan, who returned as finance minister in December, said he would be meeting with the central bank to discuss how to deal with the challenges of growth.
“We will certainly be meeting regularly with the Reserve Bank and look at the current environment to see how we approach challenges,” Gordhan said.
The National Treasury has set a growth target of 1.5 percent for 2015, though quarterly data have suggested this may be hard to achieve.