Ahead of Minister of Finance Enoch Godongwana’s maiden Medium Term Budget Policy Statement (MTBPS) to be delivered tomorrow, Agri SA agricultural economist Kulani Siweya says they are expecting the statement to be underpinned by two main themes.
“The first is the rate of fiscal deterioration being abated markedly, brought on by the commodity price windfall boosting revenue, and the positive impact on the fiscal ratios of higher nominal GDP post-Stats SA’s benchmarking/rebasing exercise,” he says.
“The second theme expected is the precarious debt outlook, though it does come at a better starting position.”
While these may be positives, caution is advised in the long term, particularly when considering that many structural challenges remain, he adds.
“Some of the things we will be looking out for include sentiments around state-owned entities and if there are any unbudgeted bailouts, as well as National Treasury’s resolve to restrain spending.
“We believe that these, amongst others, will either set us on a trajectory of turning the tide around entirely, or we will see more of the same from the new incumbent and his team.”
Siweya says that ultimately, this week’s medium-term statement should inspire confidence once again from various spheres. “This is sorely needed in a time when investment in infrastructure has been on the decline and inclusive growth is now an imperative that’s non-negotiable.”
