Zuma backs plan to borrow money

PRESIDENT Jacob Zuma has backed the Treasury's cautious programme of borrowing to help the country out of the economic crisis.

Addressing the National Council of Provinces yesterday he echoed Finance Minister Pravin Gordhan's insistence in Tuesday's medium term budget policy statement that the 7,6% budget deficit forecast for the current fiscal year must be a peak from which the country quickly retreats.

Gordhan said the public sector borrowing requirement for the current year would jump by almost half from the R198billion proposed in the February budget to an expected R284,5billion. This would take the national loan book from 22,6% of GDP last year to 41% in the year to March 2013.

Zuma said it was appropriate to borrow to keep the economy running in the face of an economic challenge imposed from abroad.