ECONOMIC WEEK AHEAD: Budget a gauge of Treasury’s integrity and ability to juggle
The Treasury’s integrity and the government’s commitment to slash spending in the 2018 budget will come under scrutiny this week, which could be make or break for SA hanging on to its last investment-grade rating. Statistics SA inflation data will also play a cameo role. The budget, which will be tabled in Parliament on Wednesday, is expected to be a juggling act between painful tax hikes, deep cuts in the public sector and last-minute demands from the remnants of Jacob Zuma’s administration. Investors, sovereign credit ratings agencies and society will keenly observe the integrity of plans to close a R50.8bn tax revenue shortfall for the year that could expand in the next two financial years. The budget deficit, the difference between expenditure and revenue, was nevertheless expected to compress further from 4% after this financial year, thanks partly to benign inflation and expected revenue and expenditure-side measures, Investec economist Kamilla Kaplan said. Inflation, also out...
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