By Alastair Sharp
CAIRO, June 6 (Reuters) - South Africa's economy is not expected to shrink by more than the 6.4 percent annualised rate reported in the first quarter of 2009, the deputy finance minister said on Saturday.
The 6.4 percent figure, when announced in May, was worse than expected and confirmed the first recession in 17 years. It was also the sharpest contraction in a quarter of a century.
'We have already reached a low of 6.4 (percent), I think that will actually be the lowest,' Deputy Finance Minister Nhlanhla Nene said on the sidelines of a conference in Cairo.
Africa's biggest economy has been hard hit by global woes, with recession in developed countries slashing demand for its minerals and manufactured goods.
'We are likely to make a come back but it is very difficult to predict,' he told reporters.
South Africa's Treasury has said it expects the economy to shrink again in the second quarter, but not by as much.
'We are looking at stimulating the economy even beyond public works,' the deputy minister said.
'As you would know manufacturing has taken a bit of a knock and we are hoping to make a bit of a turn around there. Our focus on agricultural development is also one of the areas we think we can create some employment,' he said.
When asked about the April inflation rate of 8.4 percent, the deputy minister said: 'With the current economic situation, (inflation is) not very high but also we need to guard against it actually going beyond that.'
Asked if prices were falling, he said: 'Yes, particularly food prices.'
The figure of 8.4 percent year-on-year, though slightly lower than the March inflation rate of 8.5 percent, is still way outside the 3 to 6 percent target band.
South Africa's government is under pressure from trade union allies to scrap inflation targets that they say have led to overly tight monetary policy, hurting the poor.
Asked whether inflation targeting was still worthwhile, he said: 'It is a debate, and a debate that's been going on for quite some time. We are prepared to engage with the debate but as things stand this is our target.'
(Writing by Edmund Blair) Keywords: SAFRICA ECONOMY/ (edmund.blair@thomsonreuters.com, +20 2 2578 3290, Reuters Messaging: edmund.blair.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
CAIRO, June 6 (Reuters) - South Africa's economy is not expected to shrink by more than the 6.4 percent annualised rate reported in the first quarter of 2009, the deputy finance minister said on Saturday.
The 6.4 percent figure, when announced in May, was worse than expected and confirmed the first recession in 17 years. It was also the sharpest contraction in a quarter of a century.
'We have already reached a low of 6.4 (percent), I think that will actually be the lowest,' Deputy Finance Minister Nhlanhla Nene said on the sidelines of a conference in Cairo.
Africa's biggest economy has been hard hit by global woes, with recession in developed countries slashing demand for its minerals and manufactured goods.
'We are likely to make a come back but it is very difficult to predict,' he told reporters.
South Africa's Treasury has said it expects the economy to shrink again in the second quarter, but not by as much.
'We are looking at stimulating the economy even beyond public works,' the deputy minister said.
'As you would know manufacturing has taken a bit of a knock and we are hoping to make a bit of a turn around there. Our focus on agricultural development is also one of the areas we think we can create some employment,' he said.
When asked about the April inflation rate of 8.4 percent, the deputy minister said: 'With the current economic situation, (inflation is) not very high but also we need to guard against it actually going beyond that.'
Asked if prices were falling, he said: 'Yes, particularly food prices.'
The figure of 8.4 percent year-on-year, though slightly lower than the March inflation rate of 8.5 percent, is still way outside the 3 to 6 percent target band.
South Africa's government is under pressure from trade union allies to scrap inflation targets that they say have led to overly tight monetary policy, hurting the poor.
Asked whether inflation targeting was still worthwhile, he said: 'It is a debate, and a debate that's been going on for quite some time. We are prepared to engage with the debate but as things stand this is our target.'
(Writing by Edmund Blair) Keywords: SAFRICA ECONOMY/ (edmund.blair@thomsonreuters.com, +20 2 2578 3290, Reuters Messaging: edmund.blair.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.