[BREAKING] Govt to borrow R149bn to meet spending target

Finance Minister Pravin Gordhan has tabled the 2017/18 budget predicting a 1.3% growth in gross domestic product.

A screengrab of Finance Minister Pravin Gordhan.

CAPE TOWN - Government will have to borrow R149 billion to meet its spending of R1.56 trillion this year.

Finance Minister Pravin Gordhan has tabled the 2017/18 budget predicting a 1.3% growth in gross domestic product.

Unlike previous years, when revenue outstripped economic growth, this year it is lagging behind the economy, and government is faced with a R30 billion shortfall compared with its budget estimate a year ago.

But Gordhan is optimistic that in the year ahead, the country will experience higher economic growth.

The Finance Minister says South Africa is at a crossroads; economic growth is slow, unemployment is too high and businesses are under stress.

Government debt is now at its highest levels of R2.2 trillion – more than half of gross domestic product.

Speaking ahead of the Budget Speech, Gordhan said economic transformation was imperative.

“Stated intention to stabilise debt... if we don’t grow economy it will continue to decrease space to move.”

While hoping to raise an additional R28 million in tax revenue this financial year, Gordhan is aiming to reduce government expenditure by R26 billion over the next two years.