S.African economy to slow to 2.7% growth

South Africa’s growth will slow to 2.7 percent this year as global financial woes put the brakes on the continent’s biggest economy, Finance Minister Pravin Gordhan said Wednesday.

The forecast is lower than the economy’s expected 3.1 percent growth last year, and far lower than the seven percent le4vel the government has said is needed to make a dent in South Africa’s crippling unemployment rate.

“The South African economy has averaged about three percent growth a year since 2009. Against the background of the slowdown in the global economy, real GDP growth is likely to fall to about 2.7 percent in 2012,” said Gordhan.

“We expect a recovery to 3.6 percent and 4.2 percent growth in 2013 and 2014, but these are modest rates of expansion relative to the social and developmental challenges we face and the opportunities that our mineral wealth and human capabilities offer.”

The figure falls far short of the 5.5 percent forecast for sub-Saharan Africa this year and the global outlook of 3.3 percent, but above the 1.2 percent for advanced economies, with much of Europe heading into recession.

“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,” said Gordhan, presenting his 1.1 trillion rand ($142 billion, 108 billion euro) budget.

Rampant joblessness dipped marginally last year to 23.9 percent but remains below a pre-recession peak of four years ago.

The unemployment rate rises to around 33 percent when workers who have given up hope of finding a job are included.