Treasury cautiously optimistic of higher-than-expected economic growth despite lowering 2024 forecast
Responding to public comments in Parliament on Fridday, the Treasury’s budget chief, Edgar Sishi, said government’s structural reforms could still yield higher than expected growth.
Finance Minister Enoch Godongwana (centre) and his Treasury heads during a media briefing ahead of delivery of the Medium-Term Budget Policy Statement in Parliament on 30 October 2024. Picture: @GovernmentZA/X
CAPE TOWN - The National Treasury says the country could still be in for a pleasant surprise that economic growth will be more than what it's forecast in the Medium-Term Budget Policy Statement (MTBPS).
Last week, Finance Minister Enoch Godongwana said Treasury was revising economic growth downwards for 2024 to only 1.1%.
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Responding to public comments in Parliament on Friday, the Treasury’s budget chief, Edgar Sishi, said government’s structural reforms could still yield higher than expected growth.
The National Treasury is regularly criticised for its economic growth forecasts.
Last week it revised downwards from 1.3% the economic growth forecast for this financial year.
Sishi said that while the Treasury stands by its forecasting, it’s cautiously optimistic of higher-than-expected growth.
"We've taken a fairly prudent and conservative approach by putting before Parliament and the country a set of numbers that don't yet incorporate what could be a potentially a significant improvement because of the strategy that is underway."
Sishi said that more growth could come from building state capability, public sector investment, structural reforms through Operation Vulindlela and maintaining macro-economic stability.
"There's a strong correlation between growth and employment and we need to recognise that as part of our management of the macro-economic policy."
With government debt standing at R5.2 trillion, Sishi said he did not agree with views that suggested government could continue to borrow money while it's not generating sufficient revenue, adding it also made the country a risky investment option.