Godongwana believes he's produced a pro-growth MTBPS
Despite economic growth being revised downwards since the February budget to only 1.1% in 2024, Finance Minister Enoch Godongwana said that the prospects for growth were improving.
Enoch Godongwana, the South African Minister of Finance, delivers his mid-term budget policy statement in the Cape Town City Hall, which is being used as a venue for the South African Parliament, in Cape Town on 1 November 2023. Picture: @GovernmentZA/ X.
CAPE TOWN - Finance Minister Enoch Godongwana believes he's produced a pro-growth mini-budget, in line with Treasury's fiscal strategy of balanced spending and growing the economy.
Despite economic growth being revised downwards since the February budget to only 1.1% in 2024, Godongwana said that the prospects for growth were improving.
On the downside, revenue collection is expected to be R22 billion less than estimated eight months ago, yet still on track to achieve a primary surplus.
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The economic growth forecast for 2024 has been revised downwards from 1.3% predicted in February to 1.1%.
The budget deficit is expected to narrow to 1.8% of GDP in 2024.
That's one percentage point less than previously forecast.
Debt remains high at R5.62 trillion but is expected to stabilise at 75.5% of GDP next year.
With less taxes expected to be collected than previously forecast, Godongwana said that the spending trade-offs would continue to be tough.
"In the absence of faster growth and in the face of external risks, tax revenue will remain under pressure, forcing us to make difficult decisions on where to spend. Lower revenue also means that we cannot, within the envelope, accommodate all of the demands on the fiscus."
Nevertheless, a primary surplus is still expected, although Godongwana warns this won't be a pot of money, rather just enough to stabilise debt.