Finance Minister Pravin Gordhan is set to present the most anticipated post 1994 budget this week, which comes against the backdrop of tough economic conditions.
The drought, the global economic gloom, the possibility of a sovereign credit downgrade, high inflation, plunging exchange rates, policy uncertainty and socio-political unrest are some of the problems he has to sort out.
Gordhan will walk a tight rope and has sworn to do all he can to avert a downgrade and reassure the investment community.
Economists say the budget must balance both revenue and expenditure.
Director and Tax Leader at Grant Thornton, Eugene du Plessis says, “The current economic environment, it’s just not in South Africa but internationally, is brought about by external market forces. And there are also things in South Africa that are contributing to the current state, like the rand being in its worst level in foreign currency, the drought in the country, uncertainty in political policies. So this economic environment is making it very difficult for the Minister of Finance.”
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