S.Africa to launch $3.2 billion stimulus: finance minister

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South Africa will launch a $3.2 billion package to boost the economy, Finance Minister Pravin Gordhan said Tuesday, as he revised his 2011 growth forecast down to 3.1 percent.

Gordhan told parliament the scheme would be a "competitiveness support package of 25 billion rand ($3.2 billion, 2.3 billion euros) over the next six years to boost industrial development, assist enterprises and accelerate job creation".

The scheme aims to help South African firms to become more competitive and increase exports, and also to buffer any further stutter in the economy's recovery, he said.

Details will be later provided by the trade ministry, he added.

Growth in Africa's largest economy slowed to 1.3 percent in the second quarter.

Gordhan revised his growth forecast for the year down 0.3 points from 3.4 percent, and proposed a cap on public service wage increases to focus funds on infrastructure investment to counter the gloomy world outlook.

"A year ago... we thought that we would see a sustained improvement in the global recovery and in our economy. That was not to be," said Gordhan.

"The crisis of leadership currently reflected in the eurozone and in Europe is having a damaging effect on the global economy including our own."

© 2011 AFP

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