SA’s technical recession status not a crisis - David Mabuza
The country entered into the technical recession when the economy contracted by 0.7% in the second quarter after a dismal performance in the first quarter.
CENTURION - Deputy President David Mabuza has downplayed the country’s slide into a technical recession, saying it’s not a crisis but merely challenge that can be overcome.
Mabuza was speaking at the annual National Economic Development and Labour Council (Nedlac) summit in Centurion, Gauteng.
The country entered into the technical recession when the economy contracted by 0.7% in the second quarter after a dismal performance in the first quarter‚ when the gross domestic product (GDP) shrank by a revised 2.6%.
Mabuza was honest about the state of the economy.
“The minister of finance [Nhlanhla Nene] has budgeted for a value-added tax (VAT) increase. With the SA Revenue Service indicating negative revenue collection outcomes, we’ve encountered an economic decline. Our inflation outlook is increasingly perilous.”
But he says this is not a crisis.
“I want to call these challenges not a crisis because before when we were confronted by these challenges, we overcame them.”
Earlier in September, President Cyril Ramaphosa also called for cool heads, saying South Africans must not be disheartened by the state of the country’s economy, assuring them that the government is cooking up a plan.
At the same time, Mabuza has called on business and labour leaders to help the government prepare the economy for the fourth industrial revolution.
He says the economy needs to be ready for what’s to come.
“We have to be ready to amass the benefit of technology that will transcend the physical, digital and biological spheres that holds us back.”
(Edited by Zamangwane Shange)