Chairperson, the ACDP supports the Medium-Term Budget Policy Statement which sets out government's spending plans for the next three years, based on certain macroeconomic assumptions.
As we expressed our concern at the ballooning budget deficit forecast in February, we particularly welcome the downward revision of the budget deficit from 6,5% to 5,3% of gross domestic product, GDP, for this year; reducing further to 3,2% over the medium term. This is on the back of gradual, yet sustained domestic economic growth, revised upwards from 2,3% to 3% of GDP for the year, resulting of course, in increased revenue collection, which is welcome.
However, despite a relatively healthy fiscal position, the projected economic growth is uncertain and predicated upon a number of economic variables. In this regard, the ACDP has expressed its concerns about the net loan public debt set to reach R1,46 trillion by 2013-14, which is a significant figure. I wonder how many hon members know how many noughts there are in a trillion rand. I would like them to work it out.
The actual outcome will depend largely on the pace of economic growth. In our view, government debt levels, shared by many others, must be reduced to manageable levels. Failure to do so could result in sovereign debt crises similar to those faced in the euro zone. I am sure you would agree with that. In this regard, the ACDP is concerned about the impact that the deepening credit crises of both Greece and Ireland will have on demand for South African goods. Has this been factored into the economic growth projections or is it envisaged that this contagion may spread to other European countries? You are no doubt aware that last night the markets took a hammering owing to concerns about Ireland.
Minister, you have also been vocal in your criticism of the US pumping an additional US$600 billion into its economy. We share your views on this issue and the impact that it will have on strengthening currencies such as ours with the capital inflow.
Lastly, regarding the structural reforms and the Seoul G20 meeting, we would like more information related to sustained global demand, job creation and global rebalancing, or was the meeting, in effect, much ado about nothing? I thank you.