South Africa's economic exposure to countries at the epicentre of the European market turmoil is reasonably low, Deputy President Kgalema Motlanthe said on Wednesday.

Replying to questions in the National Assembly, he said although the European Union was South Africa's biggest trading partner, exports to Portugal, Ireland, Italy, Greece, and Spain, constituted just five percent of the total.

But, the economic slowdown in the Eurozone reduced the demand for South Africa's exports, since Europe was one of South Africa's major trading partners, he said.

Slowing global growth also raised the prospects of weaker commodity prices and constrained government revenue.

Increased risk perceptions and financial market turbulence would raise uncertainty and reduce investor risk appetite, contributing to greater volatility of international capital flows and emerging market currencies, including the rand.

This raised the potential for large-scale capital outflows and currency depreciations.

There was also a risk of increased trade protectionism following a global slowdown as countries attempted to protect their own interests, Motlanthe said.

This would further reduce global growth and could harm South Africa's exports even more.

However, South Africa's financial system remained relatively well insulated from the current turmoil with little exposure to foreign funding.

Foreign funding accounted for only five percent of overall bank funding -- a small proportion by international standards, Motlanthe said.

To date, the impact on South Africa had been primarily through falling business and consumer confidence and financial market variables such as capital flows and the exchange rate.

The Medium-Term Budget Policy Statement proposed an economic support package of R25 billion over the next six years to boost competitiveness and promote structural change.

This initiative would build on several broader programmes to support growth and employment.

The government would continue to call on European governments and authorities to act more decisively to build the necessary "firewalls" to prevent the contagion spreading even further and creating increased uncertainty and economic decline across the globe.

It would also endeavour to diversify South Africa's trading partners and work with businesses to promote exports to other parts of the world, Motlanthe said.