Finance Minister Malusi Gigaba’s maiden medium-term budget policy statement in Parliament on Wednesday received a pummelling from the market as the deficit ballooned, revenue collection tanked, spending breached its limits and debt soared to unprecedented levels. By 5pm, the rand had gone through R14 to the dollar after trading at R13.73/$ before the minister began speaking and the yield on the benchmark R186 jumped to 9.18% from 8.86% earlier in the day. Banking shares wilted, declining 1.11% with Barclays Africa hardest hit, shedding 1.85% to close at R140.30 per share in Johannesburg. Economists said the budget had increased the chances that SA’s credit ratings would be taken down to junk status when the ratings agencies provide an update in November. The statement projects that the deficit before borrowing for 2017-18 will rise to 4.3% from the 3.1% target set in the February budget; spending will be R3.9bn higher than expected; and revenue will fall short by R50.8bn, higher tha...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.