15/06/2017 15:23 SAST | Updated 15/06/2017 15:23 SAST

5 Things To Take Away From Malusi Gigaba's Economic Plan

He says we are in a recession and it will take time for government's interventions to take effect.

Malusi Gigaba,
Bloomberg via Getty Images
Malusi Gigaba,

Finance Minister Malusi Gigaba insists South Africa's economy is a glass half full within the current recession -- but warns that Treasury interventions will take time to take effect.

He was speaking at a press briefing on Thursday where he outlined government's planned interventions to stimulate inclusive growth in the economy.

Here are five things we need to take away from his speech:

1. It is highly unlikely that government's 2017 growth projection of 1.3% will be realized. This is because the country's Gross Domestic Product contracted a further 0.7%, which means we are now in a recession.

2. The worst contractions were seen in trade, electricity, gas and water, and manufacturing. Weaker trade activities reflect strained domestic demand as consumer and business confidence have not improved and credit extension remains weak.

3. Gigaba said Treasury will work within the fiscal framework and that he supports and will implement it. Another one of government's priorities is advancing inclusive growth and economic transformation.

4. Gigaba believes government needs to leverage on improved conditions in agriculture and finalise key policy in mining and other sectors.

5. Gigaba said his department will work with the financial sector to adopt and implement a new Financial Services Charter as well as fast-track public consultation and finalisation of the Public Procurement Bill.