The outlook puts Africa’s biggest economy well below regional forecasts and far below the seven percent that officials say is needed to reduce unemployment and poverty in one of the world’s most unequal societies.

“The South African economy has averaged about three percent growth a year since 2009,” Gordhan told parliament as he presented the national budget.

“Against the background of the slowdown in the global economy, real GDP (gross domestic product) growth is likely to fall to about 2.7 percent in 2012,” he added.

The government has identified major capital investments and on Wednesday listed 43 projects worth 3.2 trillion rand ($414 billion, 313 billion euros), which the minister said were “ambitious but not unmanageable.”

About one quarter of the projects are already financed. The government is still considering the feasibility of the rest of the schemes in energy, housing, transport, education and water that would be completed by 2020.

“We are beginning an exciting phase in the South African economy … We are taking an investment-led path,” Gordhan told reporters before presenting his 1.06 trillion rand budget to parliament.

Growth is expected to improve to 3.6 percent next year, before rising to 4.2 percent in 2014, but Gordhan warned that more needed to be done in a country where one in three of the workforce has no job.

“We have to implement a strategy for faster and more inclusive economic growth. We are not doing well enough in growing our economy and creating jobs for our young people,” he told lawmakers in the nationally televised speech.

The growth forecast falls far short of the 5.5 percent average predicted for sub-Saharan Africa and the global outlook of 3.3 percent but is at least above the 1.2 percent forecast for advanced economies.

“We still have doubts about whether Europe has the will and the capacity to resolve its challenges in a way in which it creates less uncertainty around the world,” Gordhan told reporters.

“It’s in that context that government is saying we can’t wait for Europe’s recovery.”

The 845-billion rand plans already green-lighted for the next three years include 300 billion rand in energy and 262 billion rand in transport and logistics.

The government is also wooing private investors in its drive to cut widespread poverty, having taken pains to soothe rattled investors by dismissing calls to nationalise mines and land riches.

“Government has supported the recovery from the 2008 recession but as we expand infrastructure investment over the period ahead we have to see business investing in our future as well,” Gordhan said.

With one of the world’s biggest gaps between rich and poor, social spending makes up 57 percent of total expenditures but jobs and economic growth are the key to better incomes and less poverty.

“South Africa has deep and liquid capital markets through which long-term capital can be raised at competitive rates by government, state enterprises and the private sector,” the minister said.

“Our development finance institutions are capable of raising capital and co-financing investments of the private sector, state entities and municipalities,” he added.

Rampant joblessness dipped marginally last year to 23.9 percent but rises to around 33 percent when workers who have given up hope of finding a job are included.

The expected budget deficit is 4.6 percent of GDP, down from 4.8 percent last year and set to fall to 3.0 percent in 2014. The current account deficit is forecast to widen from 3.3 percent in 2011 to 4.4 percent of GDP in 2014.

South Africa’s total debt is expected to rise to 36 percent of GDP this year and to reach 38.5 percent of GDP by 2014.