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South Africa not heading for recession – Gordhan

Cape Town – South Africa’s economy will not slip into recession, Finance Minister Pravin Gordhan said on Thursday.

Gordham was countering predictions by some economists that sharp currency weakness pointed to economy contraction this year.

“We are growing as an economy we are not going into a recession.

“But we are not growing fast enough,” Gordhan told a media briefing after a cabinet meeting.

Gordhan, who returned as finance minister in December, said he would be meeting with the central bank to discuss how to deal with the challenges of growth.

The rand, among the most volatile of major emerging market currencies, slumped to a record low of 17.9950 to the dollar during Asian trade on Monday.

The depreciation was due to fears that China wanted to weaken its currency aggressively, though it has since recovered some ground.

The depreciation has, however, helped the export prospects of South Africa and combined with a sharply lower global oil price that has helped to alleviate pressure on South Africa’s current account.

In 2010, Gordhan wrote a letter to then-Reserve Bank Governor, Gill Marcus, asking the central bank to be mindful of employment and growth alongside its price stability and inflation mandate.

“We will certainly be meeting regularly with the Reserve Bank and look at the current environment to see how we approach challenges,” Gordhan said.


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