Sunday, February 8, 2009

South Africa set to keep on spending

JOHANNESBURG — South Africa's Finance Minister Trevor Manuel is likely to commit in Wednesday's budget to big spending plans, pushing the country further into deficit, as he steers the economy through the global financial crisis.

But expected lower tax revenue and a proud record of prudent fiscal policy built up over more than a decade, may temper any sharp shift from the Treasury's previously conservative stance.

Mr. Manuel announced in his mid-term budget in October the government would stick to its massive infrastructure spending plans in spite of tight world credit markets, and signalled the budget would drift back into a small deficit.

Recession in developed economies has hit growth in Africa's biggest economy, although most analysts do not see it dipping into contraction.

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