Statistics South Africa today announced that our economy grew at only 2.7 % in the first quarter of this year, significantly slower than the 3,2 % achieved in the last quarter of 2011.
These figures show that South Africa is now growing slower than almost every other developing country: India (6,1 %), Indonesia (6,3 %), Chile (5,6 %), Columbia (6,1 %) and Poland (4,4 %) are all significantly outperforming us.
South Africa’s slowdown comes even as the rest of the world obsesses about faster growth and how to achieve it. In Brazil, President Dilma Rousseff and Finance Minister Guido Mantega have recently tabled $ 1bn worth of tax cuts to drive growth in their economy.
In contrast, our National Budget relegated the acceleration of economic growth to a long list of focus areas, instead of putting it at the centre of Government’s plans.
Our so-called flagship economic plan, the New Growth Path, does not live up to its name, favouring interventions to achieve “social equity” rather than a bold plan to unleash South Africa’s growth potential.
President Zuma has also failed to respond to our declining recent growth performance. This failure shows up in the increase in unemployment: in the first quarter of this year the number of unemployed South Africans grew by 282 000.
Finance Minister Pravin Gordhan needs to respond to this new slowdown in our growth performance by cutting through the ideological stand-off in the Cabinet and tabling a bold plan to accelerate growth in South Africa.