DHAKA: The South African economy is ‘in crisis’, says the country’s finance minister Pravin Gordhan.

The comments came ahead of his Budget speech, in which he cut the country’s growth forecast for 2016 to 0.9%, down from 1.7%, reports the BBC.

He conceded the economy is struggling with shrinking growth, 25% unemployment, and widespread poverty.

The South African currency, the rand, which has halved over the past five years, fell as he was speaking.

The measures announced in the budget were aimed at stopping the country falling into recession and to appease the rating agencies who have threatened to downgrade south Africa to junk status.

Gordhan announced government spending cuts, a civil service job freeze and some moderate tax rises.

These increases would affect property sales, fuel, sugary drinks, alcohol, tobacco and capital gains, as well as environmental levies, which are expected to bring in an extra 18bn rand ($1.18bn).

He had been expected to announce plans on privatizing state assets, he fell short of that but said the government was looking at the possibility of merging the loss-making national carrier, South African Airways, with the state-owned SA Express airline ‘with a view to engaging with a potential minority equity partner’.

Privatization has long been resisted by sections of the ruling African National Congress.

BDST: 2043 HRS, FEB 24, 2016
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