South Africa prepared for global crisis: finance minister

The world could still avoid slipping into a double-dip recession, South African Finance Minister Pravin Gordhan said on Thursday while adding that South Africa was prepared whatever the case.

“I think our own view at the moment is it’s 60-40 against the double dip,” said Gordhan.

“There are other people who are saying its now 50-50 depending on the decisiveness with which the rest of the world begins to tackle its problems as well.”

The current global crisis had created greater uncertainty for developing countries, hurting South Africa’s real economy and hitting jobs and manufacturing, Gordhan said.

But despite this, the country had not been forced to introduce austerity measures taxing ordinary people and state services, he said.

“Our financial regulatory system is fairly good and has survived the first crisis and certainly we will ensure that it survives the second crisis,” he said.

In order to so, the government will continue to consolidate its deficit, he added.

“We want to bring the deficit levels down,” said Gordhan who earlier this year forecast a budget deficit of 5.3 percent for 2011.

“There will be other crises, there will be other contingencies that the country will face, and we want to make sure that the country can bounce back if worse conditions actually emerge and have the capacity to actually do so,” he said.

South Africa was in a “more fortunate position” on many fronts, the minister said.

Inflation was in the targeted 3-6 percent range, the benchmark interest rate was at its lowest in decades and the economy had manageable debt levels unlike elsewhere in the world.

“South Africa by comparison this year will be about 34-35 percent (debt-GDP ratio) and at the maximum we will reach 40 percent,” Gordhan said.