The 2011/12 estimate compares with a 5.3% gap projected in the February 2011 Budget and a 5.5% deficit forecast in October last year, the Treasury said on Wednesday.

This compared with a deficit of only 1.0% in 2008/9 and a surplus of 1.7% in 2007/8.

The revisions in the February 2012 Budget are due to better than expected revenue growth with revenue growth for the full fiscal year projected at 9.7%.

In recent months revenue growth has exceeded this by a large margin as government revenue rose by 22.6% year on year (y/y) in December from 16.7% y/y in November and 18.0% y/y in October, while spending increased by only 5.1% y/y in December from a 2.6% y/y rise in November after a 0.7% y/y fall in October.

The revenue increase was 15.3% y/y for the full 2010/11 fiscal year, while expenditure only rose by 7.8%. The respective increases in the first nine months of 2011/12 are 11.7% y/y and 7.9% y/y, so the deficit in the first nine months is R121.2 billion compared with R129 billion in the same period last fiscal year.

 The new projections show the deficit narrowing from the 4.8% of this fiscal year to 4.6% (5.2% projected in Oct) in 2012/13. The gap is seen narrowing further to -4.0% in 2013/14 (expected in October at -4.5%). The new estimate for 2014/15 is a gap of 9-3.0% (-3.3% in October) in 2014/15.

Go to Budget 2012 Special Report