Johannesburg - South African President Kgalema Motlanthe warned Friday that the global financial crisis posed a serious threat to jobs in Africa's largest economy, where manufacturing and mining have shed thousands of jobs in recent months.

Delivering the president's annual State of the Nation speech at the opening of parliament in Cape Town, Motlanthe warned South Africans against underestimating the local fallout of recession in leading markets.

"The global economic meltdown does pose serious dangers for our economy, in terms of job losses and the quality of life of our people," he said.

While South Africa was less severely affected than many other countries, falling demand for exports was forcing a cutback in production and retrenchments in some sectors, he noted.

"As such, we have been forced to tone down our forecasts in terms of growth and job creation," he said. The government has forecast growth to come in at 3.7 per cent for
2008, down from 5.1 per cent in 2007. Analysts predict the figure to fall below 2 per cent this year.

Motlanthe said government was working with social partners on an economic stimulus programme that included a 690-billion-rand (69.3 billion dollar) public investment programme over three years and increased public sector employment and social spending.

As access to international credit dries up, the government would find "creative" ways to source funding, including looking to local development finance institutions, partnerships with the private sector and workers' pension funds.

Motlanthe, a former union leader, was installed as caretaker president in September last year, following the ruling African National Congress's ousting of former president Thabo Mbeki.

Motlanthe's stint at the helm is expected to come to an end after general elections slated for April, when ANC leader Jacob Zuma is poised to take office in the likely event of an ANC victory. (dpa)