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Interview: S. Africa seeks economic development in balanced way: senior official


20:31, March 26, 2013

JOHANNESBURG, March 26 (Xinhua) -- South Africa is trying to accelerate economic growth after having suffered stagnation due to the recent global financial crisis, says a senior official.

"We are in a transition period now trying to implement the counter-cyclical response to the global financial crisis," Michael Sachs, director of fiscal policy at the National Treasury, said in a recent interview with Xinhua.

"We are also balancing infrastructure projects, servicing debts and also taking care of education, health and others," added the economist.

Noting that South Africa lost 1 million jobs during the global financial crisis, he said his country is trying to create jobs, reduce inequality and poverty, and stabilize the economic and social sectors.

The economy grew by 2.5 percent in 2012, but the growth rate would increase to 2.6 percent in 2013 and 3.8 percent in 2014, according to the South African Reserve Bank.

Although the country's economic future "is uncertain," South Africa is trying to create fiscal buffers to cushion the country in case of another economic downturn, said Sachs.

South Africa managed to weather the effects of the economic crisis because of its strong tax base, and it did not feel the severity of the global economic crisis because it had low debt when the crisis started, he added.

"Low level of debt assisted the country. The debt level was between 20-25 percent of the GDP, which gave a country a lot of space to borrow. And it is expected to be around 35 percent of the GDP this year," Sachs said.

Trade with other African countries and other emerging markets also helped when the West was hit hard by the crisis, he noted.

"Trade between South Africa and other African countries as well as other emerging markers were important to sustain the economy," Sachs said. "Exports to China and other BRICS countries increased tremendously."

In 2007, 38 percent of South African manufactured exports went to Europe and 25 percent to other African countries, while by 2012 the two ratios were reversed, according to the Reserve Bank.

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