The outlook for the economy remains positive and all indications are that its expansion run will continue, according to Finance Minister Trevor Manuel.

Opening debate on his department's budget vote, he said South Africa was entering a new phase of economic growth and development, with expanded investment and employment opportunities.

"Despite the gradual weakening of the international economy, the South African economy grew strongly in 2002, averaging growth of three per cent on the back of encouraging strong growth in investment.

"Only with a lag has it started showing signs of weakening, in response to the global performance and higher-than-expected domestic inflation.

"This lag confirms the health and resilience of the South African economy".

Manuel said this month marked the country's 56th month of economic growth, and the trend was expected to continue.

The most recent data showed official reserves were rising following the elimination of the new open forward position (NOFP), and prospects for higher investment were improving.

In addition, the cost of borrowing would continue to drop with growing confidence abroad in South Africa, and capital inflows should improve on the back of improved sovereign ratings.

"The outlook for our economy remains positive," he said.

Manuel also said the recent error in calculating inflation was not unique to South Africa.

"Though regrettable, this type of error is not unique to Stats SA, in fact, statistics agencies in some of the world's largest economies have, at times, committed worse errors".

However, such a mistake was taken seriously, he said.

Stats SA cut CPIX (headline inflation minus mortgage costs) inflation for April by almost two percentage points after it was found that outdated rental figures had inflated the data.

Manuel said the strengthening of the organisation and the veracity of its outputs would receive ongoing attention, in partnership with some of the leading statistical agencies in the world.

The International Monetary Fund, Statistics Sweden and Stats Canada had been invited to evaluate Stats SA data.

The organisation would present the results of Census 2001 to President Thabo Mbeki on July 8, and in this there was no margin for error.

"We are deeply indebted to the sterling work being undertaken by the Statistics Council, under oath, to ensure that the quality of the results is entirely above reproach".

Despite the recent difficulties, Stats SA's commitment to be the standard-bearer of statistics of the highest quality remained very strong, he said. – Sapa.