South Africaâ€™s economy will need to grow by 7 per cent annually for years if it is to create jobs and reduce poverty, Finance Minister Pravin Gordhan said on Thursday.Â Gordhan said risks for global growth had risen sharply and reiterated that domestic growth was expected to average around 3 per cent this year. We want a sustainable economy that will create jobs and reduce poverty.
We need to grow by 7 per cent over a 20-year period and previously, weâ€™ve only done 5 per cent. In South Africa, we can talk about a moderate recovery and it is expected to be around 3 per cent this year.
Itâ€™s a challenge,â€ Gordhan said in a speech at the presentation of results from the state-owned agricultural bank. Africaâ€™s largest economy grew by 4.6 per cent in the first quarter from the previous quarter.Â Household demand – a key contributor to the economy – has lagged which weighed on growth.
The central bank expects an expansion of 2.9 per cent in 2010 after a 1.8 contraction last year marked South Africaâ€™s first recession since 1992. It has not given a specific forecast for the second quarter.