MoneyWeb

South Africa's economy will need to grow by 7 percent annually for years to come if it is to create jobs and reduce poverty, Finance Minister Pravin Gordhan said on Thursday. Gordhan said risks for global growth had risen sharply and reiterated that domestic growth is expected to average around 3 percent this year.

"We want a sustainable economy that will create jobs and reduce poverty. We need to grow by 7 percent over a 20 year period and previously we've only done 5 percent. It's a challenge," Gordhan said in a speech at the presentation of results from the state-owned agricultural bank.

Africa's largest economy grew by 4.6 percent in the first quarter from the previous quarter. Household demand -- a key contributor to the economy -- has lagged which weighed on growth.

The central bank expects an expansion of 2.9 percent in 2010 after a 1.8 contraction last year marked South Africa's first recession since 1992. It has not given a specific forecast for the second quarter.

"We have risks to (global) growth that have risen sharply and increased turbulence in financial markets," Gordhan said. "In South Africa we can talk about a moderate recovery and it is expected to be around 3 percent this year."

The U.S. Federal Reserve downgraded its economic outloook at its policy meeting this month, adding to worries that the U.S. economic recovery might be slowing down.

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