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Gordhan: domestic, global growth outlook bleak

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JOHANNESBURG –?South African Finance Minister Pravin Gordhan said on Friday that this domestic and global growth outlooks remained bleak and sounded a stern reminder concerning the financial health of state-owned companies, that include power utility Eskom

“As the country we’re also operating within a global environment this is simply not visiting see development of 4, 5 or 6 percent for years into the future,” Gordhan told a task creation summit in Johannesburg.

Africa’s most innovative economy narrowly avoided downgrades to subinvestment status from a round of reviews with the three major ratings agencies during the first one half of the season, but is teetering on the brink of recession.

The economy contracted 1.2 percent inside first quarter as mining shrank and also a severe drought took its toll on agriculture.

Gordhan said the land had to boost investor confidence by reduction of uncertainty in economic policy and improving governance at state-owned firms.

“State-owned entities have guarantees to your tune of around half a trillion rand ($35.3 billion) with the state,” Gordhan said.

“The true secret concern that ratings agencies whilst others might have is always that as a result of variety of mismanagement, those guarantees shouldn’t be called out at any stage.”

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