Chairperson, the ACDP commends the Minister and the National Treasury for prudently handling public finances during the past financial year. The South African Revenue Service, Sars, is also to be commended for collecting R2 billion more revenue than anticipated by 31 March this year.
While the economy is forecast to grow at 3,2% of the gross domestic product, GDP, for this year, much will depend upon the slowing economic growth in developed countries. We are, however, particularly encouraged that South Africa's first-quarter growth rate was 4,8%. However, weak United States job and house price data last week again sparked fears of a double-dip recession, particularly for developed countries.
However, Minister, the question is whether these are justified. Stock markets around the world are already reversing their gradual gains as economic growth slows. There is also the increased prospect that Greece may default on its debt, which could lead to a downturn in Europe, considering that European banks hold significant Greek debt. As we know, a sovereign default by a Euro member could undermine the viability of European banks, creating another banking and credit crisis such as the one caused by the subprime mortgages.
How, then, does South Africa compare? South Africa's situation is clearly different and is characterised by improving growth and tax revenues. We also do not have the sky-high public debt and negligible economic growth rates plaguing certain European countries. However, were a double-dip recession in the Euro areas to materialise, it will undoubtedly impact on emerging markets, including South Africa, due both to investor risk aversion as well as its impacting on exports to the European Union. We trust that this will not occur.
The question was posed in the committee as to what benefit accession to Brics will hold for South Africa. Hopefully, it will result in greater market access to Brics countries. We also look forward to seeing much more beneficiation of raw materials taking place. However, we need to be mindful that the Brics countries are also competitors for capital and resources required to drive growth and economic development.
It is crucial, then, for South Africa to position itself appropriately to benefit from capital flows and investor attention. The perception exists that South Africa is becoming less competitive as a place to establish and do business, while other African hubs such as Nigeria, Kenya and Angola are becoming increasingly easier to operate in. This, hon Minister, must be addressed to attract foreign direct investment, which is set to reach R150 billion in four years for Africa.
To conclude, the ACDP remains positive on our economic growth prospects. It is crucial that National Treasury works closely with other departments and the private sector to achieve job creation, economic growth and poverty reduction.
We wish to thank all the officials in the National Treasury, Sars and other state organs for their hard work and commitment.