Government to cut spending further if growth does not pick up

February 25, 2016 5:46 AM

Gordhan, appointed to a second stint as finance minister following President Jacob Zuma's bungled cabinet reshuffle in December, unveiled a package of spending cuts, civil service job freezes and moderate tax hikes on Thursday.

South Africa's Finance Minister, Pravin Gordhan gestures during a media briefing after he was reappointed to the position on Sunday night by President Jacob Zuma in Pretoria, South Africa December 14, 2015. REUTERS/Siphiwe Sibeko

South Africa will impose more spending cuts if economic growth remains below 1 percent in the next two years, its finance minister said on Thursday, a day after presenting an austere budget aimed at heading off credit rating downgrades.

"If we do not get above 0.9 percent (growth) in the next year or two, we have to do more on this balancing act, more of cutting expenditure and more of raising revenue," Finance Minister Pravin Gordhan said.

The National Treasury expects the economy to grow by 0.9 percent this year, its slowest expansion since emerging from a recession in 2009.

Gordhan, appointed to a second stint as finance minister following President Jacob Zuma's bungled cabinet reshuffle in December, unveiled a package of spending cuts, civil service job freezes and moderate tax hikes on Thursday.

He told Reuters that the budget had done "more than enough" to preserve South Africa's investment grade sovereign rating.