CAPE TOWN, Oct. 24 (Xinhua) -- Finance Minister Tito Mboweni pledged on Wednesday to pursue a stronger fiscal policy and monetary stability to ensure economic growth.
"Our growth reforms will be underpinned by fiscal and monetary stability," Moboweni said while delivering his maiden Medium Term Budget Policy Statement in Parliament.
Mboweni said he will ensure that the country's debt stabilize and be reduced as soon as possible.
Any growth plan must be built on two macroeconomic preconditions: a sustainable fiscal position and low and stable inflation, said the minister.
The government remains committed to its goal of stabilizing and bringing down the debt-to-GDP ratio, he said.
In recent months, deteriorating economic performance, revenue shortfalls and a weaker rand have all contributed to higher debt projections, Mboweni said.
The consolidated budget deficit is estimated at four percent in 2018/19, compared with the 2018 budget projection of 3.6 percent of GDP, according to Mboweni.
Gross debt is on pace to stabilize at 59.6 percent of GDP in 2023/24, he predicted.
In recent budgets, the government took important steps by reducing the expenditure ceiling and increasing taxes.
Given the weakness of the economy, the government is aiming to manage these pressures, while avoiding additional fiscal measures that could limit growth, the minister said.
He said South Africa's growth forecast has been revised down from 1.5 percent to 0.7 percent for 2018.
Other developing countries, however, are expected to grow by 4.7 percent in 2018 and 2019, according to Mboweni.
South Africa's growth is expected to recover gradually to over two percent in 2021 as confidence returns and investment gathers pace, Mboweni said.
Over the past decade, South Africa's growth has been significantly slower than its peers, he said.
"With the right initiatives, we can once again recouple our growth performance with that of the global economy.
"Our growth agenda must raise potential output by boosting productivity, increasing competition and reducing the cost of doing business." he said.
