FISCAL PRUDENCE
Investors and agencies wary ahead of Gigaba’s budget
They will be watching the numbers closely to see whether and how the finance minister will stay on the promised path of fiscal prudence
Finance Minister Malusi Gigaba will have his big moment on Wednesday, when he presents his first medium-term budget to a market that is bracing for a sharp slide in SA’s fiscal fortunes and waiting to see whether the minister has a plan to arrest the decline. Ratings agencies and investors will be watching the numbers closely to see whether and how the minister will stay on the path of fiscal prudence, as he has promised, in a context in which growth has disappointed and revenue collections for the current fiscal year are expected to undershoot February’s budget targets by R30bn-R60bn. They will also be keeping a wary eye on the effect that bail-outs to South African Airways and other ailing state-owned enterprises will have on the fiscal deficit. Gigaba has already raided the National Revenue Fund for the cash to finance a R5.2bn rescue of SAA, going back on the government’s commitment to do so in a "deficit neutral" way. Markets will be watching to see where he plans to find the t...
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