Finance Minister Pravin Gordhan is to give his Medium-Term Budget Policy Statement, known as the mini-budget, in the National Assembly today. Gordhan estimated that the budget deficit which represents the gap between government spending and revenue would be around 4.6% of GDP and that would come down to 3.0% by the 2014/2015 fiscal year. But some analysts argue that’s increasingly looking unlikely. Econometrix Chief Economist Azar Jammine says: “I believe that our deficit and our debt will rise because economic growth will not turn out to be as high as what was previously forecast”.Recent sovereign credit downgrades by Standard & Poors and Moody’s mean Gordhan will need to go slow on any plans that could see that budget deficit rise. When this happens, so too does the public debt because government has to borrow money to fund the gap between its income and its expenditure.
DA finance spokesperson Tim Harris has meanwhile said Gordhan must show investors that he can provide strong leadership on the country’s economic direction. “And that not only is he the minister with the plan to drive economic growth and fiscal consolidation in the country but that he is also the minister with the plan that will be implemented.”
The DA’s finance spokesperson, Tim Harris, has accused government of sending mixed signals on its economic policies. Harris says Gordhan must show investors that he has a firm hand on the tiller.
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