S.Africa's Gordhan: 2010 GDP seen "somewhat higher"

By Wendell Roelf

CAPE TOWN (Reuters) - South African Finance Minister Pravin Gordhan said on Tuesday economic growth this year could be "somewhat higher" than forecasts and the government will maintain its fiscal prudence.

"Preliminary data suggest that we will see moderate economic growth this year, perhaps somewhat higher than we projected in February," he said in his budget speech to parliament.

The National Treasury in its February budget said it expected the economy to grow by 2.3 percent this year and 3.2 percent in 2011.

But Gordhan warned high unemployment showed that more urgent work needed to be done to restructure the economy.

Unemployment in Africa's largest economy rose to 25.2 percent in the first quarter, after falling into its first recession in nearly 20 years in 2009.

"Last week's employment statistics were a sobering reminder that more must be done, more urgently, to restructure our economy and create jobs, particularly for young people," he said.

In a later speech to business leaders in Johannesburg, President Jacob Zuma said the loss of about 1 million jobs since the beginning of last year was a cause for concern and "renewed action".

Even though the economy was recovering, more jobs could be lost.