The global financial crisis could ”severely affect” South Africa’s economy and may force it to cut its growth forecasts, Jacob Zuma, leader of the ruling ANC, said on Thursday.
”South Africa has so far been insulated from the global financial crisis …. [but it] could severely affect our economic growth, eventually affecting our economic forecasts,” Zuma said.
His comments were broadcast on South African Broadcasting Corporation radio, which said he made them at the opening of a call centre on Thursday. It also quoted him as saying the ANC would assess how the credit crisis would effect the country’s ambitious infrastructure plans.
Zuma is expected to take over as president of Africa’s biggest economy after an election due next year.
Thabo Mbeki, who was ousted as president last month, was praised by investors for his pro-business policies. But the ANC is under pressure to step up the delivery of housing and services to millions of poor South Africans, and some investors are worried Zuma may adopt a more leftist stance.
South Africa’s banks have so far escaped the global credit crisis thanks to tough restrictions on investing abroad that limited their exposure to toxic assets.
But Finance Minister Trevor Manuel has warned higher borrowing costs and a weaker rand may restrict South Africa’s infrastructure plans ahead of the Soccer World Cup.
Manuel is expected to cut growth forecasts next week when he unveils the country’s mid-term budget policy statement amid a severe global financial crisis and fears of a looming world recession. – Reuters