SA's economy not heading into recession: finance minister

South African Finance Minister Pravin Gordhan on Thursday dismissed predictions that the country' s economy was heading into recession.

Such recession predictions were "alarmist", Gordhan said at a press briefing in Pretoria after a fortnightly cabinet meeting.

"If you look at the recent World Bank report we are growing and not going into recession," the minister said.

But he acknowledged that South Africa's economy is not growing fast enough.

"We are not solving the question of inclusion and marginalization of black businesses," said Gordhan.

The World Bank report, released last August, predicted that if the status quo in the labor market persists, South Africa's real gross domestic product (GDP) will grow by about 3.7 percent per year and real per capita income growth would average 3.1 percent per year between 2015 and 2030.

By comparison, the report shows that if some 5.8 million jobs are created over the next 15 years to absorb the new working age entrants and lower the unemployment rate by three quarters, and if labor productivity and educational attainment improves, real GDP growth could reach 5.4 percent per year, enough to allow income per capita to double in real terms by 2030.

But since the report's release, South Africa has encountered more problems, among them a severe drought, the rapid depreciation of the rand and capital outflows in the wake of the weakening rand.

These factors prompted economists to predict that SA's economy into two consecutive quarters of negative growth that signals a recession.

Everything is being done to stabilize the situation, Gordhan said.

"We are serious in our intent to bring all South Africans together to recognize the global picture, recognize the emerging market picture, recognize where commodity producers find themselves and recognize also some of the difficulties we have," he said.

At its meeting on Wednesday night, the cabinet reaffirmed the need to intervene strategically and more decisively to restore the momentum of economic growth.

The government will reach out to social partners, particularly business and organized labour, to build consensus on the collective actions required to stabilise the economy, build confidence, raise the level of investment and return South Africa to a path of inclusive economic growth, Minister in the Presidency Jeff Radebe said at the press briefing.

The government, he said, will continue to build on the country' s diverse economic structure.

Radebe said export earnings continue to depend to a great extent on metals and semi processed raw materials.

The depreciation of the rand over the last few years offers much better prospects for export growth and, combined with a lower global oil price, has helped to relieve pressure on the current account, said Radebe.

"The global environment is regarded as particularly challenging for emerging markets, with lower commodity prices and tightening of monetary policy in the USA, putting pressure on capital flows and growth expectations.

"This has translated into significant volatility in capital markets," Radebe said.

The cabinet has endorsed stronger measures to restore a sustainable fiscal path, taking account of the weakened outlook for the global economy and its domestic consequence, Radebe said.