Finance minister Malusi Gigaba delivered his maiden budget speech on Wednesday. Here are the salient points from his announcement:
- Economic growth projections have been revised downwards from 1.3% to 0.7% for 2017, 1.1% in 2018 and 1.5% in 2019.
- Consolidated budget deficit to widen to 4.3% of GDP in 2017/18, up from 3.1% projected in February.
- Revenue shortfall forecasts:
R50.8 billion 2017/18
R69.3 billion 2018/19
R89.4 billion 2019/20
- Gross national debt to increase to 61% of GDP by 2022 with debt-service costs approaching 15% of main budget revenue by 2020/21.
- In order to stabilise gross debt below 60% of GDP over the coming decade, government will have to cut costs or increase tax to the tune of 0.8% of GDP.
- Over the next three years, consolidated spending will increase by an annual average of 7.3%, from R1.6 trillion in 2017/18 to R1.9 trillion in 2020/2021.
- Fiscal consolidation is seemingly still on the agenda. No new allocation for nuclear.
- Increased risk of more SOCs defaulting on government-guaranteed debt. SAA to receive the balance of its R10 billion bailout that it hasn’t yet received, by the end of March. This will be funded from the contingency reserves, declared savings and R4 billion borrowings, according to Treasury officials.