South Africa's fiscal gaps in danger of widening due to low growth - Treasury

South Africa's low economic growth, rising debt and depleted revenues will hurt the Treasury's ability to close the country's large fiscal deficits, a senior official said on Wednesday.

Director General of the National Treasury, Lungisa Fuzile, warned in a document presented to a parliamentary committee that the country would have to do more with less and introduce a range of cost cutting measures to make up for the poor economic growth, expected at 0.4 percent in 2016 by the central bank.

"In the absence of action, low economic growth leads to shortfalls in revenue with fiscal consolidation being derailed as national debt rises," Fuzile said.

The government of Africa's most industrialised country is under pressure to lift growth above 1 percent to avoid ratings downgrades to subinvestment later in the year, after sharp downturns in manufacturing and mining sectors saw the economy contract in the first quarter.

Finance Minister Pravin Gordhan, who has been summoned to appear in court in November over fraud charges, promised in February to cut the budget deficit to 3.2 percent from 3.9 percent in 2015 through a number of spending cuts.

Gordhan is due deliver his medium term budget before parliament budget on October 26, with ratings firms likely to announce their decisions by December.

- Reuters