ABN - South Africa’s GDP is set to grow by 1.3% in 2017 and 2% the following year, according to Finance Minister Pravin Gordhan, who delivered the nation’s annual budget speech this week.
However, these figures are significantly lower than estimates made last year, and were accompanied by a number of debilitating fiscal measures.
“The projected rate of growth is not sufficient to reduce unemployment or impact significantly on poverty and inequality. It falls well short of our NDP goals,” said Gordhan.
The finance minister also announced a new tax bracket for the wealthy, which should raise an additional R16.5 billion.
Higher tax rates will also be applied to fuel prices, along with alcohol, tobacco and sugary drinks, which should accumulatively generate a total of over R5 billion.
Spending on social grants will rise by an annual average of 8.2% to R209 billion by 2019/20.
Gordhan described South Africa as being at a crossroads, with tough choices to be made in order to reach development outcomes.