FFC: Mboweni's February Budget no longer attainable
The Financial and Fiscal Commission (FFC) painted a bleak picture of the impact of the COVID-19 crisis on the economy, which was already struggling before the virus arrived in March.
CAPE TOWN - The Financial and Fiscal Commission (FFC) said that the government should look to its entire balance sheet to help the economy recover from the impact of the COVID-19 pandemic and lockdown.
The commission said that this should include looking at the assets of the Public Investment Corporation (PIC), the Government Employees’ Pension Fund (GEPF) as well as South Africa’s foreign exchange reserves.
It’s told a virtual meeting of Parliament’s Standing Committee on Appropriations that the fiscal support package announced by the government was not enough and that bigger and bolder steps were needed.
The FFC, which advises the state on how to spend, said that only R95 billion of the R500 billion fiscal support package could be described as new money being injected into the economy and said that this was not enough.
The commission’s Eddie Rakabe: "The commission is of the view that there’s a need to move towards a bolder stimulus, particularly given the fact that estimates indicate the economy is likely to contract by up to 20%."
The commission’s painted a bleak picture of the impact of the COVID-19 crisis on the economy, which was already struggling before the virus arrived in March. Moody’s subsequent downgrading of South Africa’s sovereign debt rating was another blow.
"We are of the view that the government needs to deploy much of its balance sheet to deal with the post-effects of Covid-19."
Rakabe said that the fiscal framework tabled by Finance Minister Tito Mboweni with his February Budget was no longer attainable.
Mboweni is planning to table a revised, emergency Budget in late June.
For official information about COVID-19 from the Department of Health, please click here.