SA will have to do more with less, Treasury warns
Government is under pressure to lift growth above 1% to avoid ratings downgrades later this year.
JOHANNESBURG - Treasury Director-General Lungisa Fuzile is warning that South Africa's low economic growth, rising debt and depleted revenues will hurt the finance ministry's ability to close the country's large fiscal deficits.
In a document presented to a parliamentary committee, Fuzile warns that the country will have to do more with less, and introduce a range of cost cutting measures to make up for the poor economic growth, expected at 0.4% this year.
Government is under pressure to lift growth above 1% to avoid ratings downgrades later this year, after sharp downturns in manufacturing and mining sectors saw the economy contract in the first quarter.
Finance Minister Pravin Gordhan, who has been summoned to appear in court next month over fraud charges, promised in February to cut the budget deficit to 3.2% from 3.9% in 2015 through a number of spending cuts.
Gordhan is due deliver his medium term budget before Parliament in two weeks' time, with ratings firms likely to announce their decisions by December.