Pretoria - The cabinet has endorsed the rating by Moody’s as confirmation that South Africa was on a solid path to economic recovery.
Acting Minister in the Presidency Nosiviwe Mapisa-Nqakula and economics cluster chairman Gugile Nkwinti said yesterday the country's economic recovery plan would yield results in the coming months and years.
Read: IMF and Moody's see SA recovery
Nkwinti said several measures had been taken to kick-start the economy, including building infrastructure in the former homelands and townships.
The government projected 5% economic growth in the next five years, but external factors had slumped growth.
The projection for growth this year is 0.6%
Economic growth has been sliding in the past eight years, with the highest growth rate being 5% in 2004.
Mapisa-Nqakula said the meeting between President Jacob Zuma and business last week was the first package of measures to ring in changes to the economy. Business, labour and the government met in Pretoria last Friday to look at progress made to kick-start growth.
“Cabinet welcomes the announcement by ratings agency, Moody’s, which reaffirmed the country’s credit rating at two notches above sub-investment grade,” said Mapisa-Nqakula.
Moody’s maintained South Africa’s negative rating - a sigh of relief for the government as there were fears that South Africa could be downgraded. This would have led to capital flight, increased costs of borrowing, high unemployment and a decline in the economy.
Nkwinti said slow growth has contributed to growing unemployment. However, they were hopeful that the interventions in the economy would begin a cycle of growth.
PRETORIA NEWS