Business Unity South Africa (Busa) says it broadly agrees with the Minister of Finance's assessment of the global and domestic economic situation and also believes that, although SA will not escape the effects of the global economic slowdown, economic growth will still be positive in 2008/9.

The SA economic situation nonetheless needs to be carefully managed, it cautions, as the global slowdown has been superimposed on an economy which has in any case come to the end of its longest economic upswing on record in SA.

"Busa also emphasises the need to maintain certainty and predictability in macro-economic policy and that it would not be in South Africa's interests to depart from prudent economic policies. These have helped to cushion the global impact to date and they have up until recently enjoyed progressively positive international credit ratings. If the country is to continue to attract foreign investment it is essential to maintain confidence in our economic policies and raise the growth rate in the economy," the business represntative body said.

Busa believes that foreign capital inflows are crucial to finance the deficit on the current account of the balance of payments, which will come under increasing pressure as exports suffer because of the world economic recession.

Ill-conceived policies

"Busa therefore urges that South Africa should not espouse any ill- conceived policies that will damage its capacity to attract capital, raise its growth rate and maximise the number of jobs created at any given growth rate. SA needs to achieve a much higher growth rate with a sustainable current account deficit, for which it will have to remain globally competitive.

"Busa has therefore begun to engage on its economic concerns with the ANC leadership and hopes to continue to have a valuable exchange of views in the challenging period ahead," the business representative body added.