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Brief note intended as a more regular interface with our clients. The emphasis is to provide our interpretation of important economic events, such as South African Reserve Bank interest rate statements, and key data releases, including GDP growth figures.
In presenting his second Medium-Term Budget Policy Statement (MTBPS), Finance Minister Nhlanhla Nene had to incorporate the adverse revenue impact of a weaker GDP growth outlook. Furthermore, the Treasury was faced with the budgetary implications of the higher than expected public sector wage deal for the next three years. Against this backdrop, it was almost inevitable that the fiscal outlook would deteriorate. Indeed, while the figures for the current (2015/16) fiscal year are largely similar to those presented in February, the key fiscal parameters have worsened over the medium term. This is reflected in higher budget deficits, more elevated government debt levels and (relative to the February outlook) an increased borrowing requirement.
