South Africa: Euro crisis impacts trade

South African exports to Europe - a major trading partner - had been hit hard not only by the slump in demand associated with the euro-zone debt crisis, but also by the volatility of the rand, which undermined the competitiveness of local enterprises, Trade and Industry Minister Rob Davies has said. The shaky outlook for exports to Europe could contribute to lower economic growth in the coming year, torpedoing the government’s ambitious plans to boost job creation and reduce poverty. The Treasury cut the economic growth forecast for this year to 3,1 per cent in the medium term budget policy statement last month, and its expectations of it rising to 3,4 per cent next year could prove too optimistic if Europe’s debt crisis pulls that continent into a recession.